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 March 2021 when compared to the price noted in the month of February 2020 used in determining the ruling retail price. The FOB price increased by 7.66% from R11.86/kg as noted in the month of February 2021 to R12.77/kg recorded in the month of March 2021. 

EXCHANGE RATE MOVEMENT

Since the previous price revision in March 2021, the Malawi Kwacha has depreciated against the South African Rand by 8.53% trading at K57.10/ZAR from K52.61/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 12.11%. Under the Automatic Pricing Mechanism (APM), LPG qualified for an upward price adjustment since the change in landed cost was beyond the ±5% band.

Therefore, in line with the Automatic Pricing Mechanism, the MERA Board resolved to revise upwards the retail price of LPG effective 16th April, 2021.

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
            1,952.00          2,065.00         5.79%

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

SIGNED

LEONNARD CHIKADYA

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

15th April 2021