REVIEW OF THE RETAIL PRICE OF LIQUEFIED PETROLEUM GAS (LPG) IN THE MONTH OF AUGUST 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.

 

LPG PRICES ON THE INTERNATIONAL MARKET

The average FOB price for LPG decreased in the month of July, 2019 when compared to the price noted in the month of June, 2019 used in determining the ruling retail price. The FOB price decreased by 10.66% from R11.45/kg as noted in the month of June 2019 to R10.23/kg in the month of July 2019.

 

EXCHANGE RATE MOVEMENT

Since the last price revision in July, 2019 the Malawi Kwacha has appreciated against the South African Rand by 5.07% from K56.36/ZAR to K53.50/ZAR.

 

RESULTANT RETAIL PRICE

MERA reviewed the combined effect of the movement of the LPG FOB prices and exchange rate of the Malawi Kwacha to the South African Rand and noted that the landed cost of LPG decreased by 4.65%. Under the Automatic Pricing Mechanism (APM), LPG did not qualify for a price adjustment since the change in landed cost is within the ±5% band.

 

MERA Board, therefore, in line with the Automatic Pricing Mechanism resolved to maintain the retail price of LPG as implemented in July 2019 as follows:-    

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

           2,291.83

               2,291.83

 -

     

All operators are required to sell LPG at a price not exceeding this maximum retail price.

 

 

SIGNED

 

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

BOARD CHAIRPERSON                         CHIEF EXECUTIVE OFFICER

8th August, 2019                                   8th August, 2019