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 decreased in August 2022 when compared to the average FOB price obtained in the Month of May 2022 on which the ruling airfield prices are based. The Jet A-1 average Free on Board (FOB) price has decreased by 7.28% from USD1,079.75/MT to USD1,001.14/MT.

EXCHANGE RATE MOVEMENT

Since the last In Bond Landed Cost (IBLC) review in June 2022, when airfield prices were last revised, the Malawi Kwacha has remained relatively stable trading at K1,036.25 against 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 decreased by 5.10% and 5.18% for Kamuzu and Chileka International Airports, respectively. Under the Automatic Pricing Mechanism (APM), Jet-A1 qualify for a price revision since the change in landed cost was above the ±5% band.

Therefore, in line with the Automatic Pricing Mechanism, the MERA Board resolved to revise downwards Jet A-1 airfield prices effective 15th September 2022 as follows:

Airport Current Maximum Airfield Price (Kwacha per Litre) Recommended Maximum Airfield Price (Kwacha per Litre) % Change
KIA 1,463.70 1,401.06     -4.28
CHILEKA 1,415.94 1,351.67     -4.54

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

Signed

Reckford Kampanje

BOARD CHAIRPERSON

14th September 2022