Mutharika shields the poor in fuel hike: Malawi govt provides 50% subsidy

Government is paying half of the total amount which Malawians would have been paying on fuel price increase .

This government subsidy will ensure that the price increases that would be passed to the consumers for other goods and services are minimal as economic experts are warning of tough economic times ahead.

Malawi Energy Regulatory Authority (Mera), in a statement, says fuel is now sold at K888 per litre from K824.70 while diesel is now sold at K890.99 from K815 and paraffin is now sold at K790 from K648.10.

The regulator said the adjustments are due to the escalating fuel prices on the world market.

Renowned economist Ben Kalua said the fuel hikes are justified, saying the fuel prices on the world market have been escalating but in Malawi, the fuel price stabilisation fund cushioned the prices.

He however asked the government to reduce imports affected by fuel increases to avoid escalating high cost of living.

“The fuel prices will affect all sectors because Malawi is a landlocked country and depends on fuel for the transportation of its goods and services,” he said.

Kalua also said that due to erratic supply of electricity, most institutions use fuel for power generation of their gen sets.

“This will have an impact on production costs, consumers will be affected by the production costs as a result, the government will not be able to collect much taxes as was the case before,” he said.

Fuel prices were last increased significantly two years ago in Malawi.

However to protect Malawians from bearing a 100 percent of the increase, government is providing a subsidy, paying half of the increment rate.

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