MERA set to announce fuel price increase

Malawi Energy Regulatory Authority (MERA) has announced that it is reviewing current trends of the international market and other economic factors to determine possible increase of petroleum products following the increase on landed cost of petrol, diesel and paraffin.

In a statement issued on Tuesday, MERA says since the determination of the current pump prices in March 2021, the landed costs of petrol has increased by 20.44%, diesel by 12.03% and paraffin by 12.23%.

Chief Executive Officer Henry Kachaje not afraid of implementing tough decisions

But the landed cost of aviation fuel (Jet A1) has reduced by an average of 1.38% when compared to last review done in July 2021.

The Regulator says the key factors that affect the landed costs of petroleum prices are those that are determined by the international market and the exchange rate of the Malawi kwacha against major currencies.

MERA reserves funds to cushion pump prices under the Price Stabilization Fund but “as at 7th September, 2021, this Fund’s balances for petrol, diesel and paraffin average K1.5 billion against the recommended minimum of K5 billion.

MERA reiterates that under the Automatic Pricing Mechanism, which was adopted in 2012, the prices are adjusted when the change in the landed cost is beyond the plus or minus 5% trigger band.

Using Automatic Pricing Mechanism that involves global fuel pricing trends, MERA’s Liquid Fuels & Gas Pricing Advisory Committee meets on the first Tuesday of every month to review prices of liquid fuels and gas.

The Committee next submits its recommendations to the MERA Board and within 48 hours, the Board is supposed to make a resolution on the Committee’s recommendations, as provided in the Liquid Fuels and Gas (production and supply) Regulations, 2009.

MERA applies the Automatic Pricing Mechanism in setting the maximum retail prices for liquid fuels and gas prices, as according to the law.

The Law provides for a Price Stabilisation Fund (PSF) at 5% of in-bond landed cost (IBLC) in which prices are reviewed upwards if the change in IBLC is above 5% and downwards if it is below 5%.

When the change is below 5%, the difference is channeled into the Price Stabilisation Fund to cushion fuel prices should there be an increase within the -5% benchmark.

Thus MERA says in the statement that the “outcome of the energy price reviews will be communicated in due course”.

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Kambewa Ngozo
2 years ago

Why do we to transport fuel by trucks? We were supposed to be using Railway line or contract pipe line as Zambia is doing. Za chisoni pa nyasaland.

Chifundo Ganizani
Chifundo Ganizani
2 years ago

All this the fault of the amwenye who are doing this

John Chitedze
John Chitedze
2 years ago

Bwana Kachaje and your friends at MERA. Feel free to raise the price of petrol or diesel mmene mungafunire. Ife tinabvomela. Bola DPP inachoka m’boma!

The Observer
2 years ago

It is unfortunate that those who suffer from fuel increases are ordinary people. The government CEOs who increase the prices get free fuel and the least they get is 500 litres which they sell through kusungula. This must stop we must all suffer together.

Phyot Olera Kun Yini
2 years ago

Kachaje does not have a masters degree required for his job. The only qualification he has to be MERA CEO is being chewa by tribe. And HRDC is happy about this. Zamanyazi kumalawi.

2 years ago

Just increase the prices.why labouring us with all these.explanations?we already know these.we hace heard this language since 2012.

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