Mera dismisses fuel price hike reports

Malawi Energy Regulatory Authority (Mera) says it has not approved any new fuel pump prices as opposed to a viral communication purporting an increase of the products.

This position follows a leaked internal communication from the Reserve Bank of Malawi (RBM) on the 151st Energy Pricing Committee (EPC) Meeting held on July 5 2022.

Mera chief executive officer Henry Kachaje said in a statement on Thursday that fuel pump prices remain as effected on June 23 2022.

He said: “The Mera board, the only authority responsible for determining prices of energy sales and services, has not made any fresh determination on energy prices. Mera always makes its pricing decisions known to the public.”

In the viral communication, it was indicated that the committee recommended that prices for petrol, diesel, paraffin and Jet-A be adjusted upwards by 13.56 percent, 18.96 percent, 29.02 percent and 12 percent, in that order.

RBM on Thursday owned the memo but regretted its leakage, saying the meeting was convened to review in bond landed costs (IBLC) for all petroleum products and electricity tariffs.

In an interview on Thursday, RBM spokesperson Ralph Tseka said the central bank as a member of EPC  made a presentation and someone leaked the report.

He said: “Someone attended the meeting and when you come back, you report to the authority and someone was writing a memo to the committee to report. Someone has leaked the memo.

“Normally, when the committee meets, it recommends to the Mera board which makes a decision. But sometimes, the board doesn’t effect those recommendations as they may use PSF [Price Stabilisation Fund] to cushion consumers.”

Tseka emphasised that the leaked report was for the authorities, but “leaked by the work of an unscrupulous colleague”.

The memo recommends that prices of petrol be adjusted to K2 270 per litre from K1 999, diesel to K2 284 from K1 920, and paraffin to K1 627 from K1 261.

It also recommends that Jet A-1 price at Kamuzu International Airport in Lilongwe should go up to K1 638.30 from K1 463.70. While at Chileka International Airport in Blantyre, should go up to K1 593.14 from K1 415.94.

Read the leaked memo in part: “In arriving at this decision, the committee noted that fuel on board prices had increased from the levels recorded in June 2022, during the time they effected the previous adjustment, with a magnitude above five percent threshold as stipulated in the automatic pricing adjustment model.”

Mera hiked fuel prices last month by a recent 34 percent, which was also attributed to the introduction of finance charges at K16.72 per litre to cover costs that importers are incurring obtains imports financing and in-bond landed costs.

It also introduced a loss recovery charge of K72.35 per litre to collect importation losses that have accumulated due to the increasing free-on-board prices on the world market and the high cost of financing fuel imports in previous months.

Mera also reinstated the rural electrification levy that was suspended to moderate the April 2022 pump price adjustment.

These were added to other levies, namely the energy regulation levy at K19 per litre, road levy at K141.54 per litre, Malawi Bureau of Standards cess levy at K3 per litre, strategic fuel reserve levy at K10 per litre, carbon tax at K5 per litre and PSF at K59.47.