In less than a month after Malawians panicked after Malawi Energy Regulatory Authority (Mera) increased fuel pump prices, the authority on Friday night announced reduced pump prices.
Mera, on November 22, increased the pump prices after Malawians had gone 20 months—between November 2016 and July 2018—riding in the luxury of stable prices.
From the last time fuel prices were adjusted upwards, Malawians expressed concerns through the mainstream media and different social media platforms.
And, at one of his rallies, Vice-President Saulos Chilima, who is also UTM party leader, called on authorities to reduce fuel prices as dictated by global trends.
In announcing the new prices, Mera, in a statement signed by its chief executive officer Collins Magalasi and board chairperson the Reverend Joseph Bvumbwe, say the prices were considered following recent trends in the world petroleum products prices and changes in other macroeconomic fundamentals on the local market and their impact on energy prices.
The new prices are as follows: Petrol is now at K923 50 per litre, down from K990 30, representing a 6.75 percent reduction; diesel is at K949 60 per litre, from K990 40, a 4.12 percent reduction while paraffin registered a dismal 0.41 percent, now selling at K781 80 from K785 00.
The November upward adjustment sparked fear from Consumers Association of Malawi (Cama) of tougher times ahead while the Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe said the price hike was going to have a direct bearing on the economy.
Kalilombe, in an interview yesterday, said it was his prayer that the exchange rate—the major factor in fuel prices changes—was going to remain stable for further good things for the nation.
“If fuel prices go up, inflation goes up and it brings all sorts of problems to the economy. Things will be fine if our kwacha continues to remain stable,” Kalilombe said.
He said global changes and other local microeconomic fundamentals play roles in these changes.
The Ecama president had this to say in November when prices went up: “We hope this is a temporary trend and that reversals will be experienced in the near future…”
Mera adviseds all operators to sell petroleum products at prices not exceeding the maximum pump prices set.
The authority explained that in November 2018, the average FOB prices of petrol, diesel and paraffin decreased by 19.60, 16.09 and 13.63 percentages respectively, when compared to the averages obtained in the month of October 2018 used in determining the ruling pump prices.
Malawi adopted an automatic pricing mechanism (APM) in May 2012, which entails prices going upwards or downwards in the event of set variables, notably in-bond landed cost of fuel, the exchange rate and world oil prices, changing by plus or minus five