Malawi Energy Regulatory Authority (Mera) has justified its decision not to adjust retail price margins for fuel during a recent review of prices last week.
Mera adjusted upwards wholesale margins for Oil Marketing Companies (OMCs) alongside the maximum recommended retail price for liquid petroleum and gases (LPG).
However, the move has not pleased fuel dealers, who argued the move will only worsen their operations.
In an e-mailed response on Friday, Mera senior consumer and public relations officer Fitina Khonje said when setting margins, they consider various factors that have direct impact on the profitability of businesses in the liquid fuels industry such as inflation, interest and exchange rates, operating costs and infrastructure development.
She said: “As with any price-controlled product, the petroleum products price buildup recognises the costs of conducting business and the returns that are expected thereof.
“To arrive at a reasonable and acceptable margin, all operators, including wholesalers and retailers of petroleum products are required to submit audited accounts and all other relevant information.”
She said analyses were done for those that submitted the requested information, arguing Mera could not review margins of sectors that did not submit the required information.
Khonje said the trading margins are systematically calculated to cover all related costs that offer a reasonable return. n