REVIEW OF THE RETAIL PRICE OF LIQUEFIED PETROLEUM GAS (LPG) IN THE MONTH OF NOVEMBER 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 increased in the month of November 2019 when compared to the price noted in the month of September 2019 used in determining the ruling retail price. The FOB price increased by 6.66% from R8.86/kg as noted in the month of September 2019 to R9.45/kg in the month of November 2019.

EXCHANGE RATE MOVEMENT

Since the last price revision in September 2019, the Malawi Kwacha has slightly depreciated against the South African Rand trading at K49.99/ZAR from 48.94/ZAR. The price recommendation of LPG for the month of November 2019 has considered this exchange rate movement.

 

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 increased by 8.42%. Under the Automatic Pricing Mechanism (APM), LPG qualified for a price adjustment since the change in landed cost is beyond the ±5% band.

However, MERA Board resolved to maintain the retail price of LPG by applying the Price stabilization to cushion anticipated importation losses. The LPG retail prices have been maintained as follows:     

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            1,744.75

               1,744.75

     -

     

 

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 November, 2019                                8th November, 2019