REVIEW OF JET A-1 PRICES IN THE MONTH OF NOVEMBER 2019.

BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends of the oil prices on the international market and changes in other macroeconomic fundamentals in the local market and their impact on Jet A-1 airfield prices.

 

JET A-1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet A-1 increased in October 2019 when compared to the average FOB price obtained in the Month of January 2019 on which the ruling airfield prices are based. The Jet A-1 average FOB price increased by 6.52% from USD539.65 USD/MT to USD574.82 USD/MT.

 

EXCHANGE RATE MOVEMENT

When compared to the exchange rate noted during the last landed cost review in January 2019, the Malawi Kwacha has depreciated by 0.30% to K742.01/USD from K739.78/USD. The Jet A-1 fuel price recommendation for the month of November 2019 has considered this movement.

 

JET A-1 PRICES

The MERA Board considered the combined effect of the movement of the Jet A-1 FOB prices and exchange rate of the Malawi Kwacha to the US Dollar as well as changes in local factors that determine the Jet A-1 prices. The Board noted that the Jet A-1 landed cost increased by 4.66% and 4.76% at Chileka and Kamuzu International Airports, respectively. Under the Automatic Pricing Mechanism, Jet A-1 did not qualify for a price adjustment since the In Bond Landed Cost (IBLC) changes were within the ±5% band at both airports.

 

MERA Board, therefore, resolved to maintain Jet A-1 airfield prices at a level implemented in February 2019 as follows;

 

Airport

Current Maximum Airfield Price(Kwacha per Litre)

Recommended Maximum Airfield Price(Kwacha per Litre)

% Change

KIA

705.24

705.24

    -

CHILEKA

655.61

655.61

    -

       

   

All operators are required to sell Jet A-1 at airfield prices not exceeding the maximum recommended Jet A-1 prices.

 

 

SIGNED

 

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

BOARD CHAIRPERSON                         CHIEF EXECUTIVE OFFICER

8th November, 2019                              8th November, 2019