The Malawi Energy Regulatory Authority (MERA) has revealed that it is planning to increase fuel prices in the country due to an increase in fuel transportation costs and depreciation of Kwacha against United States Dollar.
In a statement, the regulatory body says since last increase in prices in October, 2021, the Malawi Kwacha has slightly deprecated against the United States Dollar by 0.12%, from an average of K832. 49/USD to the current average of K824. 48/USD.
On the other hand, MERA says the Free On Board (FOB) prices of Petrol, Diesel and Paraffin have increased by 7.15%, 14. 87% and 15. 99% respectively.
“The combined effect of the performance of the key determinants may result in higher landed costs of petroleum products in the month of February, 2022. To date, the landed costs of Petrol, Diesel and Paraffin have increased by 6.04%, 13.35%, and 13.91% respectively.
“As at 25th January, 2022, the Price Stabilization Fund (PSF) balances for Petrol, Diesel, and Paraffin averaged K0. 9 billion against the recommended minimum of K5 billion,” reads the statement.
According to MERA, under the Automatic Fuel Pricing Mechanism, pump prices qualify for an adjustment when the landed costs of petroleum products move beyond 5% trigger limit.
In the upcoming energy prices review expected to be announced next month, MERA will consider the changes in landed costs, the PSF status, the need to enable importing companies to recover importation costs, and the goal of promoting consumers’ interests with respect to fuel prices and continuity of supply.
Currently, Petrol is being sold at MWK1,150.00/Litre, Diesel is at MWK1,120.00/Litre while Paraffin is at MWK833.20/Litre.
The statement comes at a time the citizenry is nursing the wounds of high fuel prices, a development that has caused the prices of various goods and commodities to go up. Since December, Malawians have been holding demonstrations to demand President Lazarus Chakwera to find solution to the rise in cost of living.