Review of Jet A-1 Prices in the month of December 2019

BACKGROUND

 Malawi Energy Regulatory Authority (MERA) considered recent trends of the oil prices on the international market and changes in other macroeconomic fundamentals in the local market and their impact on Jet A-1 airfield prices.

HEADING 2

Malawi Energy Regulatory Authority (MERA) considered recent trends in the world petroleum products prices and changes in other macroeconomic fundamentals in the local market and their impact on energy prices.

JET A-1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet A-1 increased in November 2019 when compared to the average FOB price obtained in the Month of December 2018 on which the ruling airfield prices are based. The Jet A-1 average FOB price rose by 6.09% from USD539.65 USD/MT to USD572.50 USD/MT.

EXCHANGE RATE MOVEMENT

When compared to the exchange rate noted during the last IBLC revision in January 2019, the Malawi Kwacha has depreciated by 0.53% to K743.68/USD from K739.78/USD.

JET A-1 PRICES

The MERA Board considered the combined effect of the movement of the Jet A-1 FOB prices and exchange rate of the Malawi Kwacha to the US Dollar as well as changes in local factors that determine the Jet A-1 prices. The Board noted that the Jet A-1 landed cost increased by 4.61% and 4.71% at Kamuzu and Chileka International Airports, respectively. Under the Automatic Pricing Mechanism, considering the differences between the actual and deemed IBLCs, Jet A-1 did not qualify for a price adjustment since the IBLC changes were within the ±5% band at both airports.

In line with the APM,  airfield prices of Jet A-1 were maintained as implemented in February 2019 as follows;

All operators are required to sell Jet A-1 at airfield prices not exceeding the maximum recommended Jet A-1 prices.

SIGNED

Rt. Rev. Dr. J.P. Bvumbwe                   Dr. Collins Magalasi

BOARD CHAIRPERSON                         CHIEF EXECUTIVE OFFICER

5^th DECEMBER, 2019                           5^th DECEMBER, 2019