The Malawi Energy Regulatory Authority (MERA) has revealed that it plans to raise fuel prices in the country due to an increase in fuel transportation costs and the depreciation of the kwacha against to the US dollar.
In a statement, the regulator said that since the last price increase in October 2021, the Malawi kwacha has depreciated slightly against the US dollar by 0.12%, to an average of 832K. 49/USD at the current average of K824. 48/USD.
On the other hand, MERA indicates that the free on board (FOB) prices of gasoline, diesel and paraffin increased by 7.15%, 14.87% and 15.99% respectively.
“The combined effect of the performance of key drivers may result in higher landed costs for petroleum products in the month of February 2022. To date, landed costs for gasoline, diesel and paraffin have increased by 6.04%, 13.35% and 13.91% respectively.
“As of January 25, 2022, the Price Stabilization Fund (PSF) balances for gasoline, diesel and paraffin averaged K0.9 billion against the recommended minimum of K5 billion,” the statement said.
According to the MERA, under the automatic fuel pricing mechanism, prices at the pump can be adjusted when the landed costs of petroleum products exceed the 5% trigger limit.
In the next energy price review expected to be announced next month, MERA will consider changes to landed costs, PSF status, the need to allow importing companies to recover import costs and the objective of promoting the interests of consumers with regard to fuel prices. and continuity of supply.
Currently, gasoline is sold at 1,150.00 MWK/litre, diesel at 1,120.00 MWK/litre while paraffin is at 833.20 MWK/litre.
The statement comes at a time when citizens are tending to the wounds of high fuel prices, a development that has driven up the prices of various goods and raw materials. Since December, Malawians have been staging protests demanding President Lazarus Chakwera find a solution to the rising cost of living.