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 decreased in the month of June 2020 when compared to the price noted in the month of April 2020 used in determining the ruling retail price. The FOB price dropped by 2.39% from R9.49/kg as noted in the month of April 2020 to K9.26/kg recorded in the month of June 2020.

EXCHANGE RATE MOVEMENT

Since the last price revision in May 2020, the Malawi Kwacha has depreciated against the South African Rand by 11.72% trading at K44.00/ZAR from K39.38/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 increased by 15.18%. Under the Automatic Pricing Mechanism (APM), LPG qualified for an upward price adjustment since the change in landed cost was noted to be beyond the ±5% band. However, the MERA Board resolved to maintain the maximum retail price of LPG and apply the Price Stabilization Fund to cover the projected importation losses in the month. The LPG maximum retail price is therefore maintained at K1,617.41 per kilogram in July 2020.   

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

Signed

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

BOARD CHAIRPERSON                             CHIEF EXECUTIVE OFFICER

9TH JULY 2020                                             9TH JULY 2020