President Chakwera rejects Mera’s 30% fuel hike, asks the regulator to soften stance
President Lazarus McCarthy Chakwera has discouraged Malawi Energy Regulatory Authority (MERA) from hiking the prices of fuel by 30 percent, this publication has learnt.
Over the past week, talk has been rife on how the regulator intends to effect upward adjustments on petroleum products to normalize the logistics of importing the commodity into the country.
Mera is experiencing choking indebtedness from artificially low fuel prices which is in turn dwindling the working capital of fuel importers. Fuel importers have incurred debts of up to K785 billion losses which must be paid by the regulator as compensations.
When Malawians caught wind of the impending hike, there has been an outcry as people fear that the decision will spiral into higher costs of all commodities on the market.
Chakwera received recommendation from MERA for the price of petrol and diesel to both be increased by not less than 30% to reflect the sharp increase in the cost of fuel on the international market over the past few months, which has since been causing fuel suppliers to Malawi to be selling fuel at a loss and causing Government to be incurring huge and unsustainable debts to suppliers.
The President has responded to these concerns and is of the view that the 30 percent hike is not a viable solution.
A source inside the Office of the President with firsthand knowledge of the matter confided in this publication that Chakwera has since rejected the proposal, arguing that though the price of fuel is set by market forces, it is the responsibility of his Government to intervene on behalf of poor Malawians where it is necessary to do so to cushion them against the shock of the global fuel price increases.
“Yes the proposal came on his desk but he has disagreed with Mera on the proposal. He has since asked them to understand the concerns of Malawians so as to arrive at a decision that serves both the economic realities and the plight of citizens,” says the source.
With this executive decision, the President has pushed back on what other stakeholders already endorsed.
Parliament and a consumer rights advocacy think-tank have already approved the 30 percent price hike as the best solution. Consumer Association of Malawi, which is mostly on the side of the oppressed is of the view that Malawi’s fuel prices have for a long time been held at one position, an economic decision that is backfiring and might explode into a crisis soon.
President Chakwera’s decision is in sync with the philosophy of his Malawi Congress Party which advocates for a democratic developmental state in which citizens thrive via pro-poor economic approaches.
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