Malawi regulator reacts to Chilima’s fuel price mathematics: ‘We don’t just copy’

Malawi Energy Regulatory Authority (Mera) chief executive officer Collins Magalasi has said the regulator does not copy international fuel prices but consider other local factors.

Magalasi: When we are doing price adjustments, we don’t just copy the international price

Magalasi was reacting to remarks made by the country’s estranged vice-president Saulos Chilima that last Saturday’s fuel price cut is too little.

Chilima said in his televised news conference on Wednesday that Mera should reduce the price of fuel further, saying oil prices have declined globally.

“MERA has only transferred 50 percent of the global oil price decline to the consumers. MERA should reduce the price further to cushion the consumers,” said Chilima.

Mera revised downwards prices for fuel following President Peter Mutharika directive on Saturday evening.

Following the price cut,   Petrol is now at K780 00 per litre, down from K930 00, representing a 16.13 percent reduction; diesel is at K765 60 per litre, from K887 00, a 13.75 percent reduction while paraffin registered a 9.71 percent reduction, now selling at K625 00 from K693 00.

Chilima said petrol should be reduced to K623 per litre petrol, K704 diesel and K504 paraffin.

However, Magalasi said it was wrong for people to equate the international pricing to the local pump price build-up.

“Fuel price determination is not arithmetic or is not one plus one,” said Magalasi.

“We don’t just copy the international price. There are several other factors that the pricing committee considers,” he added.

Magalasi said that fuel pricing is not only dependent on the cost of purchasing the commodity. He said there are other factors at play.

“The price is a product of so many things like the cost of buying fuel, the cost of transportation, insurance and cost of finance.

“It doesn’t mean that when the price at the international market has gone down by say 50 percent, then we will also reduce fuel price by the same 50 percent.”

President Mutharika directed Mera to reduce fuel prices with immediate effect to ease the public transport costs.

Public transport operators last week raised bus fares by up to 100 percent in reaction to restrictions on passenger capacity imposed as a measure to encourage social distancing and check the spread of Covid-19.

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Joni
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Joni

MR MAGALASI, WHICH MATHS ARE YOU TALKING ABOUT? THE VP KNOWS QUITE WELL WHAT HE IS TALKING ABOUT……..MAGALASI, WHAT IS MERA AFTER ALL…….THE VP IS THINKING AND TALKING ABOUT NATIONAL ISSUES AND YOURE TALKING ABOUT YOUR BULL SHIT MERA…..SO THAT YOU CAN FUNF THE STUPID DPP……Wake up, you are still young think about tomorrow…..what will happen to you after July 3 when DPP packs their bags!! What will happen to you and your children ndi mwano umenewu…mind you, you are not a politician….remain professional when talking to the VP…don’t be like your STUPID friends who have lost all what they… Read more »

M'Malawi Weniweni
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M'Malawi Weniweni

Anyone with basic algebra training will know that if you have several factors contributing to the price of fuel, a 50% reduction in only international FOB price will never result in a 50% price drop in Malawi. The exact price decrease will depend on the cost proportion of the one factor in the cost build up. For example, if international cost constitute only 50% of the cost of all the factors, a 50% drop in the cost of this one factor, will result only in about 20% drop in final price to consumers, regardless of the profit margin level. You… Read more »

Joni
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Joni

Did you ask Chilima how he reached on those prices? Dont just defend your stupid prices….You dont have fuel pricing mathematical knowledge monopoly…..which Maths are you talking about……we are not kids, we know what we are talking about….your prices are still high here and you know that …apumbwa inu….your time is just about to be up!!!

M'Malawi Weniweni
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M'Malawi Weniweni

Don’t tell Malawians lies. But I find it strange that instead of presenting your counter argument on what I posted that it is impossible for pump price to come down to the same extent as reduction in only one cost factor, all I read is irrelevant name calling and characterizing others. Not everything Chilima says is gospel truth. I have just debunked one such statement on fuel price. I challenge you to simulate any level of cost reduction on one factor of a multifactor cost structure and the final price reduction at any profit margin will never be the same… Read more »

DPP is Doomed
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DPP is Doomed

So the other countries don’t have ‘other factors’ when they pass on low prices to their citizens? Every country has insurance costs, transportation costs, etc. This country is run by dunderheads for real.

Cairo
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Cairo

The problem with Saulos is that he wants to be seen to know everything, he still wants the leadershipp of this country, unfortunately its not yet time for him and the truth is that he will never be Malawi president, trust me. History in Malawi shows that people who make a lot of noise never ascend to presidency office. Just reflect back and see who our past presidents characteristics were, Bakili Muluzi, Bingu wa Mutharika (MHSRIEP), APM, onsewa apheee. Joyce Banda did not survive in that position because of her character which is exactly the same as Saulos. Malawians siopusa… Read more »

Ngozo 1
Guest
Ngozo 1

The only problem with DDP followers is taking advantage of their passive leader thinking he is a gentleman… That’s misleading SKC now and again has bn telling you if you can’t ask him but since you chose to sideline him from your grouping you just follow what he suggests from a distance…. Time will tell when you will all agree to this brilliant Energetic young leader… Mark my words and may the good Lord forgive you…

Mangochi Kabwafu
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Mangochi Kabwafu

Mbuzi iwe magalasi. Bring down the prices or you and your dpp mbava will pay the price soon.

King Xerxes
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King Xerxes

Mr Glasses, that job is at stake. Please start praying and paying back. Tell us those other factors you are hiding. You won’t win this battle. Never. Its MCPUTM basi. Get ready aise.

Mpweya zii
Guest
Mpweya zii

Why does the government and its cadets that are all over Statutory bodies feel the need to respond to each and everything that SKC says??? Nde kuti man amanena facts and you try to hide with these nonsense rebuttals… Also Malawi only doesnt copy things that don’t milk and already thin cow i.e.mere
Malawian
Asatana inu.

Bauleni
Guest

Chilima ndi obwabwana.Says things for morale basi. He is the same guy who promised us elections will have no irregularities or rigging. Afanawa Mogo kwambili

Chakwera SKC
Guest
Chakwera SKC

Okuba odagwidwa

Tinzo
Guest

Mr Magalasi, dont fool us. Furl shud really hv been reduced further lets say 30%. We know u fund Dpp. Remove some unnecessary levies which u fail to inform the country. As fir u others who criticise Chilima to please ur masters, mwangosanduka ngolo. Chilima is a Patriot

Tinzo
Guest

Mr Magalasi, u ca

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