BACKGROUND

The 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 2022 when compared to the price noted in the month of September 2021 used in determining the ruling retail price. The FOB price increased by 10.15% from R14.28/kg as noted in the month of September 2021 to R15.73/kg.

EXCHANGE RATE MOVEMENT

Since the last price revision in October 2021, the Malawi Kwacha has depreciated against the South African Rand by 13.21% trading at K67.63/ZAR from K59.74/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 40.19%. Under the Automatic Pricing Mechanism (APM), LPG qualified for an upward price adjustment since the change in landed cost was noted to be beyond the ±5% band.

Therefore, the MERA Board resolved to revise upwards the retail price of LPG effective 10th April 2022. The LPG maximum retail prices have been revised as follows:

Current Maximum LPG Retail Price (MWK/Kg) Recommended Maximum LPG Retail Price (MWK/Kg) % Change
            2,175.00          2,640.00         21.38

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

Signed

Reckford Kampanje

BOARD CHAIRPERSON

9th April 2022