MCP says fuel hike is DPP plot to raise campaign money

The recent pump fuel price increases by the Democratic Progressive Party (DPP) government are new system by the ruling party to raise  campaign money for May 21 2019 Tripartite  Election campaign, an opposition Malawi Congress Party (MCP) legislator  has said in Parliament.

Malawi Energy Regulatory Authority (Mera)  has hiked fuel prices three times this year; in July, October and now November claiming the hike is due to increase in fuel prices on the international market when in actual sense fuel prices have down globally.

Ironically, while MERA was announcing the fuel price hike in the country, United States President Donald Trump tweeted announcing that oil prices have gone down globally.

In Parliament, legislators took to task Minister of Finance, Economic Planning and Development Goodall Gondwe as they wondered why the price increase was coming at a time when globally oil prices are on the decline. The public also expressed similar sentiments on various social media platforms including comment posted on Nyasa Times.

Lilongwe Msozi South MP (MCP) Vitus Dzoole Mwale alleged that the fuel price increase was a plot by government to siphon money for campaign through fuel levies.

Government collects numerous levies from each litre of fuel bought on the market and some of this money is siphoned to finance DPP.

According to the latest price build-up of Mera, some of levies are Energy Regulatory Levy, which costs K10 per litre of Diesel, Petrol and Paraffin; Rural Electrification Levy charged at K37.11 for Petrol, K36.71 for Diesel and K29.19 for Paraffin; Price Stabilisation Fund (PSF) at K22.61 for Petrol, K22.21 for Diesel and K21.30 for Paraffin; Fuel Storage Levy at K5 for all fuels; Malawi Bureau of Standards (MBS) Cess Levy at K0.89 for Petrol, K0.88 for Diesel and K0.84 for Paraffin and Road Fund Levy at K90.57 for Petrol and K89.73 Diesel.

This means that for every litre of fuel, K166.36 on Petrol, K164.53 on Diesel and K66.33 on Paraffin goes to government in form of Levies.

In the House, MCP’s Kasungu West MP Alex Major moved the motion on the matter and said the fuel price increase would run contrary to government claims that the economy was performing well, saying the already suffering ordinary people will be burdened further by the fuel hike, coming not long after another increase.

Another MCP legislator for Salima North West Dr Jessie Kabwila said: “In a country where there is so much poverty, we should know that we are increasing the gap between the poor and the rich.

“There are women in business who are toiling but when the price of fuel goes up, they will have less capital because of low buying power.”

Meanwhile, Gondwe and MERA chief executive office Collins Magalasi have said there is need to replenish the depleted Price Stabilisation Fund (PSF) as one factor that has contributed to the price increase.

Magalasi said the downward trend in global oil prices would only be considered at the next petroleum pricing review meeting as Malawi employs “the in month-minus-one mechanism” which entails that developments in a previous month when the product was bought  determine the prices.

According to Mera statement announcing the new prices, the Kwacha depreciated 0.57 percent between July and October which landed costs of diesel and paraffin increased 3.64 percent and 3.94 percent, respectively and petrol declined by 1.80 percent compared to the average in September.