REVIEW OF THE RETAIL PRICE OF JET-A1 IN THE MONTH OF JUNE 2022
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 May 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 has increased by 5.0% from USD1028.45USD/MT to USD1079.75D/MT.
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 depreciated by 25% trading at 1031.25 against the United States Dollar. This followed alignment of the exchange rate against parallel markets on 26th May 2022
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 29.85% and 29.92% for KIA and Chileka International 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:
|Airport||Current Maximum Airfield Price (Kwacha per Litre)||Recommended Maximum Airfield Price (Kwacha per Litre)||% Change|
All operators are required to sell Jet-A1 at prices not exceeding the above maximum recommended retail prices.
22ND JUNE 2022