Fuel dealers take on Mera on margins

Barely a week after Malawi Energy Regulatory Authority (Mera) announced an increase in margins for Oil Marketing Companies (OMCs), some players in the local petroleum fuel market have protested the new arrangement, saying it will only worsen franchise dealers operations.

In an interview on Wednesday, one of the fuel dealers who spoke on condition of anonymity said they expected Mera to adjust upwards the retail margins, considering the current economic environment.

Last week, Mera adjusted upwards the wholesale margins for OMCs alongside the maximum recommended retail price for liquid petroleum gases (LPG).

The energy regulator revised upwards the margins for OMCs from K38.67 to K46.45 per litre on petrol, diesel and paraffin while the distribution margin for deliveries beyond a radius of 10 kilometers (km) has since been revised downwards from K46.45 to K38.67 per litre.

Said one of the dealers: “We are disappointed that Mera increased margins for OMCs last week leaving margins for retailers at the same old rate, yet retailers are also experiencing increased cost of doing business as a result of the electricity tariff increase as well as frequent and prolonged blackouts.

“In case of electricity blackouts, we are forced to use generators most of the time to pump fuel to customers. In the process, the fuel which the retailers buy to sell to customers is being used to run generators.”

He said because of this, some dealers have started refusing to refuel cars when using generators unless if they are more than 10 to minimise loses, citing Monkey Bay as an example.

Mera senior consumer and public relations officer Fitina Khonje was yet to respond to a questionnaire sent to address the concerns of fuel dealers. n