Malawi Energy Regulatory Authority (Mera) says it owes petroleum importers about K30.6 billion in outstanding import losses meant to ease the cost of fuel importation to ensure a stable domestic pump price.
Briefing journalists in Lilongwe yesterday alongside Minister of Information Gospel Kazako, Mera chief executive officer Henry Kachaje said the regulator uses the Price Stabilisation Fund (PSF) to pay importers to cover for any additional cost of their petroleum imports.
He said the arrears accumulated to about K75.4 billion between December 2020 and August this year when the PSF’s total collection was about K44.7 billion which was wholly paid to the importers, leaving a deficit of K30.6 billion.
Kachaje said: “As you can see, it was no longer possible to sustain the fuel prices.”
He said Mera hopes to shore up the reserves and settle the importers’ balance.
Kazako, on the other hand, said government shared Malawians’ pain caused by the fuel price increase effected on Saturday.
“It is not any fault by government and this is beyond any control. You know in Malawi we don’t produce fuel and we source from other countries. Whenever prices there are adjusted upwards, it affects us,” he said.
Mera on Saturday adjusted upwards the pump price of petrol to K1 150 from K899.20 per litre, representing a 27.89 percent hike. Diesel went up by 24.72 percent from K898 to K1 220 while paraffin is costing 15.79 percent more at K833.20 from K719.60 per litre.
The regulator attributed the pump price upward adjustment to the depreciation of the kwacha and the rising cost of fuel on the international market due to growing demand as global economies recover from the impact of the Covid-19 pandemic.
Mera last effected pump price adjustments in March this year