Economists Association of Malawi (Ecama) has said the recent fuel price drop will not trigger commodity price reduction.
Malawi Energy Regulatory Authority (Mera) on Saturday announced the drop of fuel prices in response to the trend on the international market that FOB (Free On Board) prices have taken. This drop comes less than a month after Mera also reduced fuel prices on December 15.
Ecama executive director Maleka Thula said instead, the drop in prices will help to stabilize the inflation.
“The magnitude of the pace of inflation going up will be reduced. The commodity prices will not go up. Commodity prices will be maintained, they will not go up,” said Thula.
In a statement dated January 11 2019, Mera chief executive officer Collins Magalasi said the energy regulatory board resolved to revise the fuel pump prices downwards after assessing the international market, exchange rate movements and the resultant impact on the landed cost of petroleum products in the country.
Retail pump price for petrol, according to the statement, is now K868.00 from K923.50 per litre, diesel is now K874.00 from K949.60 per litre and paraffin is at K710.50 from K781 80 per litre.
Meanwhile, Consumers Association of Malawi (Cama) executive director John Kapito has suggested that government should appoint an independent committee that can be monitoring the market when fuel prices go up or down.
Malawi adopted an automatic pricing mechanism (APM) in May 2012, which entails prices going upwards or downwards in the event of set variables, notably in-bond landed cost of fuel, the exchange rate and world oil prices, changing by plus or minus five percent.