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 2020 when compared to the price noted in the month of May 2020 used in determining the ruling retail price. The FOB price increased by 6.74% from R9.49/kg as noted in the month of April 2020 to R10.13/kg as noted in the month of November 2020.

EXCHANGE RATE MOVEMENT

Since the last price revision in May 2020, the Malawi Kwacha has depreciated against the South African Rand by 36.59% trading at K53.79/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 42.82%. 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.

Therefore, the MERA Board resolved to revise upwards the retail price of LPG effective 17th December, 2020. The LPG maximum retail prices have been revised as follows:

Current Maximum LPG Retail Price (MWK/Kg) Proposed Maximum LPG Retail Price (MWK/Kg) % Change
            1,617.41          1,880.00         16.23%

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

Signed

Leonard Chikadya

BOARD CHAIRPERSON

DECEMBER 2020