BACKGROUND

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

PETROLEUM PRODUCTS INTERNATIONAL PRICES

In November 2019, the average FOB price of petrol increased by 3.13% while diesel and paraffin prices declined by 1.08% and 0.41%, respectively, when compared to FOB prices obtained in October 2019 used in determining the ruling pump prices.

EXCHANGE RATE MOVEMENT

Since the last In Bond Landed Cost (IBLC) review in November 2019, when pump prices were adjusted, the Malawi Kwacha has depreciated by 0.22% to K743.68/USD from K742.01/USD.

PUMP PRICES 

MERA assessed the combined effect of the movement of the FOB prices and exchange rate of the Malawi Kwacha to the United States Dollar as well as changes in local factors that determine the maximum pump prices and noted that the landed costs of Petrol and paraffin increased by 2.39% and 4.46%, respectively, while the landed cost of Diesel declined by 0.51%. The changes in the landed costs for petrol, diesel and paraffin did not qualify the three products for a price adjustment since the changes were within the ±5% trigger limit.

In line with the Automatic Pricing Mechanism, the MERA Board resolved to maintain the retail price of petrol, diesel and paraffin as follows: