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.

JET-A1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet-A1 increased in the month of November 2020 when compared to the price noted in the month of March 2020 on which the ruling airfield prices are based. The Jet-A1 average FOB price have increased by 21.54% from USD286.60/MT to USD348.32/MT.

EXCHANGE RATE MOVEMENT

Since the last price revision in April 2020, the Malawi Kwacha has slightly depreciated, trading at K768.81/USD from K743.43/USD, representing a loss in value of 3.41%. 

RESULTANT RETAIL PRICE

MERA reviewed the combined effect of the movement of the Jet-A1 FOB prices and exchange rate of the Malawi Kwacha to the United States Dollar and noted that the landed cost of Jet-A1 increased by 13.35% and 13.69% for KIA and Chileka Airports, respectively. Under the Automatic Pricing Mechanism (APM), Jet-A1 qualified for a price adjustment since the change in landed cost was beyond the ±5% band. Therefore, in line with the APM principle, the MERA Board resolved to revise upwards the maximum retail price of Jet-A1 effective 17th December, 2020 as follows:

Airport Current Maximum Airfield Price (Kwacha per Litre) Recommended Maximum Airfield Price (Kwacha per Litre) % Change
KIA 510.72 571.68 11.94
CHILEKA 457.07 508.31 11.21

All operators are required to sell Jet-A1 at prices not exceeding the above maximum recommended retail prices.

Signed

Leonard Chikadya

BOARD CHAIRPERSON

DECEMBER 2020