Consumer activist Kapito rues Malawi fuel prices increase

Consumers Association of Malawi (Cama) executive director John Kapito has taken to task Malawi Energy Regulatory Authority (MERA) for failing to cushion consumers when it effected fuel prices increase on Thursday evening.

MERA has adjusted the fuel prices following assessment of the impact in the movement in the international oil prices, exchange rate of the Kwacha to the US dollar and other micro-economic fundamentals on the landed costs of the fuel products.

Following the increase, now Petrol will be sold at K788.30/litre from K743.30 (6.05 percent increase), Diesel is at Diesel at K766.90/litre from K 722.80 (6.10 percent increase), while Paraffin has been raised from K580.40 to K609.80( 5.07 increase).

However, the country’s consumer rights body has questioned why MERA failed to use funds in the Price Stabilization Fund (PSF) to cushion the consumer from the impact of such adjustment.

In a statement made available to Nyasa Times, CAMA’s Executive Director John Kapito has since demanded MERA to explain to the nation what happened to the Price Stabilization Fund.

“While CAMA appreciates the justifications to adjust the prices, we have noted with concern the failure by MERA to use the Price Stabilization Fund (PSF) to cushion the consumer from the impact of such adjustment. It is apparent that the increase in fuel prices will have an impact on already burdened consumers as prices of basic goods and services will also automatically adjust upwards,” said Kapito.

Kapito said it was inconsiderate on the part of MERA not to recognize the effects of fuel prices hike on lower-income households.

He then questioned MERA on why it has been silent on the price stabilization fund levy which is meant to protect consumers at times like this.

“The MERA board is also silent on what happened with the K3 billion it illegally withdrew from Price Stabilization Fund (PSF) to purchase maize, which was contrary to the objectives why the fund was established.

“As consumers, we are worried at how MERA conducts itself for failing to consider the plight of poor Malawians who are being forced to pay more on basic goods and services due to failure by institutions like MERA to caution them using already set up mechanisms”.

CAMA has since demanded explanation from MERA on why it has failed to use Price Stabilization Fund (PSF), and also on the K3 billion which was claimed to have been set aside to purchase maize.

“Much as we are concerned with the current food shortage in the country, we find it out of order and lack of consideration on the part of MERA board to use Price Stabilization Fund (PSF) for something else out of its competence and mandate,” added Kapito.

Kapito has since demanded MERA to refund the K3 billion as ordered by government through Secretary to the Treasury (ST) as well a refund of fuel levy consumers have been contributing throughout this month, arguing “it is apparent that MERA has failed to utilize such levy to caution the fuel prices increase”.

MERA has been given one week to provide the information to the public on Price Stabilization Fund (PSF) and the K3 billion issues.

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