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 March 2021 when compared to the average FOB price obtained in the Month of February 2021 on which the ruling airfield prices were based. The Jet A-1 average FOB price increased by 2.02% from USD503.33USD/MT to USD513.69USD/MT.

EXCHANGE RATE MOVEMENT

Since the last price revision in March 2021, the Malawi Kwacha has depreciated against the United States Dollar and is trading at K791.86/USD from K787.86/USD, representing a loss in value by 0.25%.

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. It was noted that the landed cost of Jet-A1 increased by 1.67% and 1.71% for KIA and Chileka Airports, respectively. Under the Automatic Pricing Mechanism (APM), Jet-A1 did not qualify for a price adjustment since the change in landed cost was within the ±5% band. Therefore, in line with the APM principle, the MERA Board resolved to maintain the maximum airfield price of Jet-A1 as implemented on 9th March 2021 as follows:

Airport Current Maximum Airfield Price (Kwacha per Litre) Recommended Maximum Airfield Price (Kwacha per Litre) % Change
KIA 721.25 721.25 –
CHILEKA 667.82 667.82 –

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

SIGNED

LEONNARD CHIKADYA

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

15th April 2021