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

There was a marginal increase in average Free on Board (FOB) price of Jet A-1 in the month April 2022 when compared to the average FOB price obtained in the Month of March 2022 on which the ruling airfield prices are based. The Jet A-1 average FOB price rose by 0.44% from USD 1,028.45/MT to USD 1,033.02 /MT.

EXCHANGE RATE MOVEMENT

Since the last In Bond Landed Cost (IBLC) review in March 2022, when airfield prices were last revised, the Malawi Kwacha has remained stable trading at K825.00 to 1USD.

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 0.34% and 0.35% 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 is within the ±5% band. Therefore, in line with the Automatic Pricing Mechanism, the MERA Board resolved to maintain Jet A-1 airfield prices as follows:

Airport Current Maximum Airfield Price (Kwacha per Litre) Recommended Maximum Airfield Price (Kwacha per Litre) % Change
KIA 1,144.69 1,144.69     –
CHILEKA 1,096.81 1,096.81      –

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

Signed

Reckford Kampanje

BOARD CHAIRPERSON

7th May 2022