BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends of the oil prices on the international market and changes in other macroeconomic fundamentals in the local market and their impact on Jet A-1 airfield prices.

JET A-1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet A-1 increased in January 2021 when compared to the average FOB price obtained in the Month of November 2020 on which the ruling airfield prices are based. The Jet A-1 average FOB price increased by 28.43% from USD348.32USD/MT to USD447.37USD/MT.

EXCHANGE RATE MOVEMENT

When compared to the exchange rate noted during the last price review in December, 2020, the Malawi Kwacha has depreciated by 1.30% to K778.47/USD from K768.81/USD.

JET A-1 PRICES

The MERA Board considered the combined effect of the movement of the Jet A-1 FOB prices and exchange rate of the Malawi Kwacha to the US Dollar as well as changes in local factors that determine the Jet A-1 prices. The Board noted that the Jet A-1 landed cost increased by 18.02% and 18.53% at Kamuzu and Chileka International Airports, respectively. Under the Automatic Pricing Mechanism, Jet A-1 qualified for a price adjustment since the In Bond Landed Cost (IBLC) changes are beyond the ±5% band at both airports.

In order to allow importers recover the costs of importation, MERA Board resolved to adjust upwards Jet A-1 airfield prices at both airports effective 19th February as follows:

Airport Current Maximum Airfield Price(Kwacha per Litre) Recommended Maximum Airfield Price(Kwacha per Litre) % Change
KIA 571.68 666.83     16.65
CHILEKA 508.31 613.16     20.63

All operators are required to sell Jet A-1 at airfield prices not exceeding the maximum recommended Jet A-1 prices.

SIGNED          ____________________________________________

LEONARD CHIKADYA

 BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

19th February, 2021