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.

PETROLEUM PRODUCTS INTERNATIONAL PRICES

The average FOB prices of petrol, diesel and paraffin increased in the month of March 2020 by 9.80%, 2.29% and 2.02%, respectively when compared to the average prices which were applied when the In Bond Landed Costs (IBLC) were last revised.

EXCHANGE RATE MOVEMENT

Since the last IBLC review in March 2021 the Malawi Kwacha has depreciated, trading at K791.86/USD from K787.85/USD, representing a loss in value of 0.25%.

PUMP PRICES 

MERA assessed the combined effect of the movement of the FOB prices and exchange rate of the Malawi Kwacha to the United States Dollar as well as changes in local factors that determine the maximum pump prices. It was noted that when compared the March 2021 IBLC, the April 2021 IBLC of petrol, diesel and paraffin increased by 7.07%, 1.97% and 1.75%, respectively. According to the Automatic Pricing Mechanism (APM) only petrol qualified for an upward price adjustment since the change in its landed costs was within the ±5% trigger limit.

The Board noting the expected PSF collections in the same month, since diesel and paraffin IBLC changes were within the 5% band, resolved to maintain the petrol pump price and use the PSF collections to cover importation losses that will arise from petrol due to the higher landed costs noted in April 2021.  

Therefore, pump prices of petrol, diesel and paraffin have been maintained for the month of April as implemented on 9th March, 2021 until the next review in May 2021.

The maintained pump prices are as follows:  

Product Ruling Pump Prices in MK per litre Recommended Pump prices MK/litre Percentage Change
Petrol 899.20 899.20 –
Diesel 898.00 898.00 –
Paraffin 719.60 719.60 –

All operators are required to sell petroleum products at prices not exceeding the above maximum pump prices.

 SIGNED

LEONARD CHIKADYA

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

15th April 2021