Malawi fuel prices go up, tough times ahead
Malawi Energy Regulatory Authority (Mera) has adjusted fuel prices, a move likely to have reciprocal adjustments in transport costs and other items.
The increase, effective Friday, has been attributed to rising prices on the international market and the depreciation of Malawi currency.
MERA said in a statement that they have “considered recent trends in the world petroleum products and other macroeconomic fundamentals” to effect the fuel price adjustment.
Petrol will now be sold from K485.60 to K539 representing a 11 percent increase. Diesel will be sold K521.90 from K475.00 representing 9.87 percent.
Paraffin, a commodity mostly used by the impoverished people from the rural areas, has been increased from K390 to K434.30 representing a 11.36 percent.
The regulator said since the pump price revision on 10 August this year, prices in the international market have increased.
Exchange rate
MERA said the exchange rate of Malawi Kwacha to the United States Dollar has depreciated by 1.76 percent since the last revision in August from K284 to K289.99 to one US$ as of 4 September.
Nyasa Times first reported on Tuesday that fuel prices were set to go up, bringing more pain for hard-pressed motorists,
Tough times
Economic experts have said the fuel price increase would affect the transport sector as it will see increase in the cost of transporting people, retail goods and manufacture of products.
The economists have since warned that the increase of fuel prices will “attract an increase in inflation” and that it would affect all sectors of the economy.
“The high rising inflation rate will continue to erode the purchasing power of money, resulting in lower disposable incomes and reduced savings,” says Nico Asset Managers in its latest economic.
Consumer Association of Malawi (CAMA) boss John Kapito has said consumers should brace themselves for a chain of price increases.
“The trend of rising fuel prices is most likely to have a ripple effect on the local economy as prices of other commodities have a tendency to follow suit,” he said.
Coupled with high electricity tariffs, an increase in food prices and a weakening Kwacha has sent shockwaves throughout the country giving birth to uncontrollable industrial strikes in major cities while income levels for average employees remain stunted.
Food inflation is also on the rise because of a drought in many parts of Malawi leading to escalating prices of maize now at K3500 a bag of 50 kilograms.
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