REVIEW OF PRICES OF PETROL, DIESEL AND PARAFFIN IN THE MONTH OF SEPTEMBER 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 August 2019, the average FOB prices of Petrol, Diesel and Paraffin increased by 16.62%, 10.29% and 6.03%, respectively, when compared to the averages obtained in the month of December 2018 used in determining the ruling pump prices.

 

When compared to the FOB prices that ruled in the month of July 2019, the prices in August 2019 have declined by 9.80%, 4.77% and 5.31% 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 0.41% trading at K742.79/USD from K739.78/USD. However, on a month to month basis, the Kwacha has appreciated by 1.22% when compared to the ruling exchange rate in the month of August 2019 which was noted at K751.99/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 11.70%, 7.30% and 4.64%, respectively. The changes in the landed costs qualified petrol and diesel for a price revision since the changes in the landed costs were beyond the ±5% trigger limit and vice versa for paraffin.

 

However, the MERA Board resolved to cushion the impact of the increased landed cost of petrol and diesel beyond ±5% trigger limit 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 MWK/litre

APM recommended pump prices

% Change

Petrol

868.00

868.00

0

Diesel

874.00

874.00

0

Kerosene

710.50

710.50

0
       

 

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

 

SIGNED

 

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

BOARD CHAIRPERSON                                  CHIEF EXECUTIVE OFFICER

9th September, 2019                                      9th September, 2019