Malawi Energy Regulatory Authority (Mera) has said pump prices were raised yesterday in light of increasing global fuel prices to stabilise prices and supply of liquid fuels and gases.
Fuel prices remained stable since November 2016 as Mera was cushioning the prices using the Price Stabilisation Fund (PSF).
But according to the new price structure, petrol is now selling at K888 from K824.70 representing a 7.8 percent increase, diesel has increased by 9.4 percent from K815.80 to K890.90, while paraffin is now selling at K719.30 from K648.70, representing a 10.88 percent jump.
Mera chief executive officer Collins Magalasi said in Blantyre yesterday they continue to use the PSF to compensate importers who would otherwise make losses as import prices have been higher than selling prices in the country.
He said by raising the fuel prices, Malawi wants to ensure there is enough resources to continue to import.
“It is this PSF which we have used for many months before but as Mera, we have projected into the next five to seven years and we decided that for us to stabilise prices and supply of liquid fuels and gases for the next few years, we better make this increase.
“Based on what the international fuel prices are indicating, then we would have gone beyond what we have done today, but because we have the PSF, we have taken 50 percent and cushioned the particular forgone increase we have made,” he said.
Going forward, Magalasi said prices will continue to change depending on the global fuel cost.
In an interview, Consumers Association of Malawi (Cama) executive director John Kapito described the increment as a shock to consumers.
He said anytime fuel prices go up, it brings uncertainty and confusion on the market as traders usually take advantage of the pricing.
Since 2012, Mera has been using the Automatic Pricing Mechanism—a means where by fuel pump prices are adjusted to reflect fuel price movements on the international market and pump price adjustments reflect the changes in value of In Bold Landed Cost of petroleum products and movements of the kwacha against the dollar.