REVIEW OF PRICES OF PETROL, DIESEL AND PARAFFIN IN THE MONTH OF JULY 2019

BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends in the world petroleum products prices and changes in other macroeconomic fundamentals in the local market and their impact on energy prices.

PETROLEUM PRODUCTS INTERNATIONAL PRICES

In June 2019, the average FOB prices of Petrol, Diesel and Paraffin increased by 19.90%, 9.21% and 5.34%, respectively, when compared to the averages obtained in the month of December 2018 which were used in determining the ruling pump prices. However, on a month to month basis the FOB prices obtained in June 2019 declined by 10.0%, 9.93% and 9.25% when compared to May 2019 FOB prices, on petrol, diesel and paraffin, respectively.

EXCHANGE RATE MOVEMENT

Since the last review of the In Bond Landed Cost (IBLC) of petroleum products in January 2019, the Malawi kwacha has depreciated by 6.24% trading at K786.09/USD from K739.78/USD.

PUMP PRICES                                                                                                                         

MERA assessed the combined effect of the movement of the FOB prices and exchange rate of the Malawi Kwacha to the United States Dollar as well as changes in local factors that determine the maximum pump prices and noted that the landed costs of Petrol, diesel and paraffin increased by 19.37%, 11.22% and 9.36%, respectively, in July 2019. The changes in the landed costs qualified the three petroleum products for a price revision since the changes were beyond the ±5% trigger limit.

However, the MERA Board resolved to cushion the impact of the increased landed cost of the three products through the Price Stabilization Fund. The fuel pump prices have therefore been maintained as implemented on 12th January, 2019 as presented below:

 

 Product

Ruling Pump Prices in MK per liter

Recommended Pump prices MK/liter

Percentage Change

Petrol

868.00

868.00

-

Diesel

874.00

874.00

-

Paraffin

710.50

710.50

-

       

 

All operators are required to sell petroleum products at prices not exceeding the above maximum pump prices.

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe                       Dr. Collins Magalasi

BOARD CHAIRPERSON                            CHIEF EXECUTIVE OFFICER

5th JULY, 2019                                          5th JULY, 2019