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 April 2020 when compared to the price noted in the month of September 2019 used in determining the ruling retail price. The FOB price increased by 7.12% from R8.86/kg as noted in the month of September 2019 to R9.49/kg in the month of April 2020.  

EXCHANGE RATE MOVEMENT 

Since the last price revision in September 2019, the Malawi Kwacha has appreciated against the South African Rand by 19.53% trading at K39.38/ZAR from K48.94/ZAR. 

 RESULTANT RETAIL PRICE 

MERA reviewed the combined effect of the movement of the LPG, FOB prices and exchange rate of the Malawi Kwacha to the South African Rand and noted that the landed cost of LPG dropped by 17.26%. Under the Automatic Pricing Mechanism (APM), LPG qualified for a price adjustment since the change in landed cost was noted beyond the ±5% band. 

In line with the Automatic Pricing Mechanism (APM), the MERA Board resolved revise downwards the recommended maximum retail price of LPG effective 8th May 2020 as follows:      

Current Maximum LPG Retail Price (MWK/Kg) Recommended Maximum LPG Retail Price (MWK/Kg) % Change 
            1,744.75           1,617.41         -7.30 

All operators are required to sell LPG at a price not exceeding the above maximum recommended retail price. 

SIGNED 

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

BOARD CHAIRPERSONCHIEF EXECUTIVE OFFICER 

6th MAY 20206th MAY 2020