Airlines operating in Malawi have expressed worry over high fuel prices and appealed to government to intervene and make the country’s jet fuel price reasonable.
This comes following the recently published statement by the Malawi Energy Regulatory Authority (Mera) indicating that the regulator maintained the price of jet fuel at K561.58 (about $1.32) per litre from Kamuzu International Airport and K531.24 (about $1.24) per litre at Chileka Airport, following the global trend in the industry.
“Malawian Airline’s concern remains the fact that jet fuel price in Malawi is very high compared to most countries in the world. High fuel prices have an impact on the cost price of air tickets. In the end, it is our customers that suffer the high prices,” said Malawi Airlines public relations officer Maganizo Mazeze.
He said the fact that the fuel price has not changed is not surprising although it remains on the higher side. As such, the airline will continue to lobby authorities to bring down jet fuel prices to align with prices offered in countries within the region.
But commenting on the development, Mera acting chief executive officer Elias Hausi said local prices are determined by the free-on-board (FOB) price and the exchange rate; hence, when these result in the in-bond landed costs (IBLC) movement of over five percent, the fuel product qualifies for pump price revision of either up or down.
He said: “In-bond landed cost represents the total cost of bringing the product to Malawi, before adding levies, taxes and profit margins. The IBLC has two major influential factors—the FOB and the exchange rate.
“A week before the price review, we [Mera] published the IBLC as extracted a day before publication. We indicated that petrol IBLC had increased by 11 percent and this was done after considering the FOB and the exchange rate. This qualified petrol pump price to increase.”
Oil companies in the country have admitted that jet fuel in Malawi is more expensive than other countries due to, among other things transportation costs from ports, pointing that other countries have got facilities that help reduce the transport element in the price build-up.
Jet fuel costs $3.25 (about K1 462.50) per five litres in South Africa, $4.53 (about K2 038) in Zambia and $3.40 (about K1 530) in Tanzania compared to $6.35 (about K2 857.50) in Malawi for the same quantity.