Mera implements cost-reflective price on liquefied petroleum

Malawi Energy Regulatory Authority (Mera) says it wants the pricing for liquefied petroleum and gases (LPG) to be cost- reflective to enable investors in the supply chain make informed decisions through predictability in cost and profitability.

This comes against the backdrop of Mera recently engaging experts to do a study review of the LPG pricing to make the products affordable and eventually increase the consumer uptake through a pricing framework responsive to the nature of the business environment.

Mera spokesperson Fitina Khonje, in a questionnaire response on Friday, said easy access and affordable prices of LPG will offer an alternative to charcoal and firewood.

She said cost-reflective pricing will also bring new entrants in the LPG and aviation fuel distribution sector and induce competition.

Said Khonje: “The main objective of this exercise is to arrive at cost-reflective prices for the two products. This ensures that importers, wholesalers, retailers and distributors are achieving a fair amount of return on their investment.

“This will ensure that consumers are paying the right prices that are expected to promote consumption and improved volumes imported and consumed in the country.”

Commenting on the issue, Consumers Association of Malawi (Cama) executive director John Kapito said the review of LPG is a continuous process, especially the jet fuel that is procured by few companies.

He said the LPG sector has been controlled by one service provider; hence, it was necessary to review the pricing because it influences investment in the country.

“There is an issue of mistrust among service providers, the regulator and consumers in the country about LPG pricing and that mistrust has come from a long way back because of the lack of transparency.

“As Cama, we are now taking Mera’s work into the public domain so that we can question everything that Mera does and by doing so consumers will start building trust in Mera and start seeing what is right and what is wrong and we believe the discourse is going to change,” he said.

Department of Energy Affairs spokesperson Saidi Jabu said in an interview they are lobbying government to consider waiving some taxes and removing levies on LPG to make it affordable to majority of Malawians. n