REVIEW OF THE RETAIL PRICE OF JET-A1 IN THE MONTH OF APRIL 2022 .

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 A-1 increased in March 2022 when compared to the average FOB price obtained in the Month of September 2021 on which the ruling airfield prices are based. The Jet A-1 average FOB price has increased by 49.24% from USD689.11USD/MT to USD1028.45USD/MT.

Oil prices continue to skyrocket due to fears of security of supply following the invasion of Ukraine by Russia. Economies have resorted to stock building in fear of supply disruption from the war, Russia being one of the largest oil producers.

EXCHANGE RATE MOVEMENT

Since the last In Bond Landed Cost (IBLC) review in October 2021, when airfield prices were last revised, the Malawi Kwacha has relatively remained stable trading at K825.00 from K824.48 to the United States Dollar.

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 and noted that the landed cost of Jet-A1 increased by 35.48% and 34.80% for KIA and Chileka Airports, respectively. Under the Automatic Pricing Mechanism (APM), Jet-A1 qualified for a price adjustment since the change in landed cost was far beyond the ±5% band. Therefore, in line with the Automatic Pricing Mechanism, the MERA Board resolved to adjust upwards Jet A-1 airfield prices as follows:

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

Signed

Reckford Kampanje

BOARD CHAIRPERSON

9^TH APRIL 2022