Malawi fuel prices up, threaten consumer spending

It’s a hellish time for motorists as  they have been besieged by fuel price rises and Malawians should brace for more hard times.

Malawi Energy Regulatory Authority (Mera) has raised prices of diesel and petrol effective  July 17 2018, putting more pressure on consumers.

Mera has announced the price hike on Tuesday and is expected to have  a squeeze on incomes as  rising fuel prices threaten to prevent inflation slowing.

The cost of fuel has a significant impact on the pricing of goods and services; hence, Malawians—already reeling from the pressure of reduced buying power and a depreciating kwacha—will likely be affected by the decision.

Mera chief executive officer Collins Magalasi said in a letter ro petroleum companies seen by Nyasa Times on Tuesday that following the changes, petrol has gone up to maximum retail pump from K824.70 per litre to  K888.00 per litre whereas diesel is now selling at K890.90 per litre from K815.80 per litre.

Paraffin, used mostly by industry and the majority of the poorhouseholds, is now selling at K719.30 per litre from K648.70.for the same quantity.

Magalasi said Mera board resolved to pass through only  50 percent  of Landed Cost (IBLC) of petroleum products on pump prices “ to reflect the increasing actual landed costs of petroleum products on the international market.”

He said the regulatory board chaired by Bishop Joseph Bvumbwe further resolved  that the  remaining 50 percent increase in landed costs be “cushioned by the available  funds in Prices Stabalasisation Fund.

Prices of fuel in the country have relatively been stable in the past year.