By Bester Kayaye.
The Consumers Association of Malawi (CAMA) has pleaded with the Business community to refrain from hiking prices of essential commodities and services in response to the recent fuel price hike.
Malawi Energy Regulatory Authority (MERA) announced new fuel prices last week, and petrol is now selling at K930 per litre from K868, representing a 7.14% increase while the price of diesel has increased with 5.72% as a litre now costs K924 from K874, while MERA maintained the price of Paraffin at K710 per litre.
MERA stated that it resolved to adjust the prices upon assessing recent trends in the world petroleum products prices and changes in other macroeconomic fundamentals in the local market and their impact on energy prices.
Among other factors MERA said “the average prices of Petrol, Diesel and Paraffin increased by 16.12%, 11.55% and 6.05%, respectively, when compared to the averages obtained in the month of December 2018 used in determining the ruling pump prices, and the last In Bond Landed Cost (IBLC) review in January 2019, when pump prices were last revised.
It also said the Malawi Kwacha slightly depreciated by 0.30% to K742.01/USD from K739.78/USD.”
“The Board also considered liquidity of Price Stabilisation Fund (PSF). Since the last price revision in January 2019, MERA has been using the PSF to cushion importation losses as Free On Board (FOB) prices remained higher than the prices used in December 2018 due to geo-political factors and Organisation of Petroleum Countries (OPEC) member countries’ decision to reduce production in support of oil prices,” said MERA in the statement.
Commenting on the development, CAMA Executive Director John Kapito, says it is unfortunate that government has little control over the incident as MERA has made the decision to allow importers recover importation costs directly as the PSF can no longer contain the difference between demand and actual landed cost of petroleum products.
However, Kapito argued that the business community including bus operators should not use the price hike as a token to skyrocket prices of essential commodities and services as a lot of Malawians are in financial problems.
“At the moment we cannot deny what the market requires to be done, but our appeal as consumer body is for business operators to restrain from raising prices as the current amendment is very mean hence has very little impact on prices of social amenities.” Kapito says.
MERA maintained the retail price for Liquefied Petroleum Gas (LPG) at MK1,744.75 despite the landed cost of LPG increasing by 8.42% as it resolved to apply the Price Stabilization Fund to cushion anticipated importation losses.
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