Govt intends to slash fuel price up to 55 percent by December

By Antony Isaiah Jr

The government has divulged that it has plans to slash the price of petrol by 55 per cent by the end of this year.

Making the statement was the minister of finance, Sosten Gwengwe in reaction to the reduction of the petrol price by 10.28 that the Malawi Energy Regulatory Authority announced today, on Wednesday.

Mera has announced that the price of petro has been slashed from K1,946 to K1,746 while the prices of diesel and paraffin remain constant.

Mera says the development comes in due to the recent trends in the world petroleum products prices and their impact on the energy prices. The Regulatory body also attributed the reduction of the price to the recent stability of the Malawi Kwacha.

Part of the statement reads, “Since the last In Bond Landed Cost (IBLC) review in July 2022 for petrol and June 2022 for Diesel and Paraffin, the Malawi Kwacha has remained relativelystable trading at K1,036.25 against the United States Dollar.

“MERA assessed the combined effect of the movement of the FOB prices, the exchange rate of the Malawi Kwacha against the United States Dollar, and changes in local factors that determine the maximum pump prices on the landed cost of petroleum products.
Due to the above factors, the landed costs of the three petroleum products changed.

“According to the Automatic Pricing Mechanism (APM) only petrol qualify for a downward price adjustment since the change in its landed cost is beyond the ±5% trigger limit.
Therefore, the MERA Board has resolved to adjust downwards pump price of petrol, effective 15th September 2022. Diesel and paraffin pump prices have been maintained.”

In his remarks to the development, Gwengwe says the government is working tirelessly to have the price of the petrol at an attainable price.

“Good news, Prices of all goods depend on fuel prices. We are working tirelessly to have petrol selling at a pump price of as low as k900 by December this year,” said Gwengwe.

The price of Fuel hiked due to the impact of devaluation of Malawi Kwacha that the tonse alliance government exercised earlier this year.

Malawi Energy Regulatory Authority (Mera) announced its decision to raise fuel prices by an average of 34 per cent three months ago.

The fuel price adjustment saw the cost of a litre of petrol jumping by 44.92 per cent from K1,380 to K1,999, about $2 per litre. A litre of diesel is now selling at K1,920 from K1,470, representing a 30.61 per cent hike. The price of paraffin surged from K956 per litre to K1,236 per litre.