Fuel price hike starts biting

Malawians yesterday started feeling the effects of Sunday’s average 22 percent fuel pump price increase after some minibus operators increased passenger fares by 50 percent.

Minibus and taxi operators interviewed yesterday said the fuel pump price increase had made their operations “unviable”, hence, the hike in fares to make business sense.

Minibus Owners Association of Malawi (Moam) secretary general Coaxley Kamange in an interview yesterday said fuel, which accounts for over 80 percent of their daily operating costs, was a major burden on their businesses.

Taxi operator Madalitso Chipanda said his business was affected by the fuel pump price increase and he was forced to increase  fares.

Operators of big buses that mostly ply long distance routes across the country yesterday also indicated they were feeling the impact.

Kwezy Bus Service manager Priscilla Vitsistsi said in an interview that although they were yet to increase bus fares, they were considering the option.

She said: “We will definitely adjust the bus fares. We are waiting for consideration of other factors affecting our operations.”

But Sososo Coaches, which operates between Blantyre, Lilongwe and Mzuzu, adjusted upwards its bus fares by at least K2 000 on each route.

Passengers travelling between Lilongwe and Blantyre on Sososo Coaches are with effect from yesterday paying K14 000 from K12 000 while those commuting between Blantyre and Mzuzu are paying K22 000 from K20 000.

Random checks yesterday showed that in Blantyre, minibuses operating on the Masauko Chipembere Highway route were demanding K600 per passenger, up from K400.

On the other hand, some minibus operators in Lilongwe adjusted fares from K500 to K800 on the Lilongwe main bus terminal and Area 49 route.

In Mzuzu, minibus fares have also gone up by an average of K200 on most routes. However, on the Mzuzu-Ekwendeni route, commuters are paying 50 percent more from the previous K1 000 to K1 500.

During the interview, Kamange pointed out that Moam was still engaging operators on the new fares.

He said: “As per advice from the Competition and Fair Trading Commission [CFTC], we as Moam cannot impose fare charges on minibuses. So, it is individual operators who have raised the minibus fares.

“Moam is still engaging the minibus operators to agree on the fares and we will present the agreed figures to the association for announcement soon.”

Kamange said that hike in fuel prices always presents a cascading effect and that it was becoming increasingly difficult for operators to recover running costs.

“Considering all factors, including an increase in fuel prices, the high cost of living, an increase in the cost of repairing the minibuses and demands by our workers for wages and salary adjustment bus fares have to go up” he said.

Economics Association of Malawi (Ecama) president Frank Chikuta said in an interview yesterday considering that most Malawians rely on public transport, the increase in transportation cost will affect the cost of living.

He said: “We expect the inflation rate to go up. However, we will not expect the pressure to continue after crop harvest season.”

But Chikuta commended government for cushioning Malawians by suspending and reducing some levies in the petroleum price build-up.

Malawi Energy Regulatory Authority (Mera) increased fuel pump prices by 20 percent per litre for petrol, 31.25 for diesel and 14.74 percent for paraffin with effect from Sunday. Petrol is now selling at K1 380 per litre from K1 150, diesel at K1 470 from K1 120 and paraffin K956 from K833.20 per litre.

The energy regulator said to mitigate a higher fuel price increase, its board temporarily removed Rural Electrification Levy and Energy Regulation Levy component of K4 per litre being provision for Mera office complex.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president James Chimwaza on Sunday welcomed the slight increase, but maintained that it will still have adverse effects on businesses in the country.

“The increase was expected because it is triggered by external forces. However, we have to mitigate the impact of external factors using locally available means to sustain businesses and the economy,” he said.

But in an earlier interview, Consumers Association of Malawi (Cama) executive director John Kapito hoped that the business community will not take advantage of the situation to increase commodity prices unnecessarily.

Besides fuel, prices of other commodities such as fertiliser, cooking oil and bread have also escalated owing to the effects of the Russia-Ukraine conflict which has made production and importation of raw materials for such commodities expensive.