Review of Retail price of Liquefied Petroleum Gas (LPG) in the month of December 2019

BACKGROUND

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.

LPG PRICES ON THE INTERNATIONAL MARKET

The average FOB price for LPG increased in the month of November 2019 when compared to the price noted in the month of September 2019 used in determining the ruling retail price. The FOB price increased by 12.53% from R8.86/kg as noted in the month of September 2019 to R9.97/kg in the month of December 2019.

EXCHANGE RATE MOVEMENT

Since the last price revision in September 2019, the Malawi Kwacha  depreciated against the South African Rand by 3.06% trading at K50.44/ZAR from K48.94/ZAR.

RESULTANT RETAIL PRICE

MERA reviewed the combined effect of movement of LPG FOB prices and exchange rate of the Malawi Kwacha against the South African Rand and noted that the landed cost of LPG increased by 14.94%. Under the Automatic Pricing Mechanism (APM), LPG qualified for a price adjustment since the change in landed cost was beyond the ±5% band.

However, MERA Board resolved to cushion the increase of the landed cost through the Price Stabilisation Fund and maintain maximum retail price of LPG as follows:   

All operators are required to sell LPG at a price not exceeding this maximum retail price.

SIGNED

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

BOARD CHAIRPERSON                            CHIEF EXECUTIVE OFFICER

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