Fuel price increase stirs panic

After about 11 months of stable fuel prices, the Malawi Regulatory Authority (Mera) yesterday announced increased fuel prices, which have brought panic among motorists.

The Consumers Association of Malawi (Cama) has since expressed fear that the adjustments will negatively affect consumers.

According to the adjustments effective yesterday, as announced by Mera chief executive officer Collins Magalasi, petrol is now at K930, from K868 while diesel is at K924, from K864. Paraffin remains at K710.

In a WhatsApp response yesterday, Cama executive director John Kapito, said it’s unfortunate that petroleum prices are adjusted after a long spell of stable petroleum prices cushioned by the Price Stablisation Fund (PSF), which he claimed has now been depleted.

Said Kapito: “Unfortunately, people have no cash to afford most basic goods and services and prices of fuel have a negative spiral effect on prices of goods and services and this will have a negative impact on their livelihoods.”

He said traders will take advantage of this increase on petroleum prices to increase prices of goods and services, which is going to hurt consumers and consequently will impact negatively on inflation, which had been stable for a long time.

However, Kapito appealed to traders not to take advantage of this increase as it will also affect growth of their businesses.

According to Magalasi, the decision to adjust the fuel prices follows Mera’s assessment of liquidity of the PSF as well as the FOB prices worldwide.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) is on record as saying fuel price hikes threaten economic gains as they have the potential to slow down growth.