Malawi Operates fuel Automatic Pricing Mechanism

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An Economist, Henry Kachaje, says Malawi operates an Automatic Pricing Mechanism (APM) that among other things, considers international prices and exchange rate movements.

Kachaje gave a historic fuel prices; in December, 2016 Petrol was being sold at KK824.70, Diesel KK81.80, in December, 2017, Petrol K824.70, Diesel KK81.80, in December,2018, petrol K923.50, Diesel K949.60, in December, 2019, Petrol K930.00, Diesel K924.00, in December, 2020 Petrol K834.60, Diesel K826.40, saying the prices of fuel of December, 2020 are actually lower than the prices Malawi had in December, 2018 and December, 2019.

Writing on his official face book page, Kachaje said the lower fuel prices Malawians have been enjoying since April, 2020, Petrol at K690.50, Diesel K664.80, were largely due to depressed world prices due to the impact of COVID-19 pandemic where most cars, planes, ships were grounded and factories in the developed world closed due to lockdown.

But, one of the social media contributor, Onjezani Kenani in his analysis writes, Malawians have reacted angrily with the steep increase in fuel prices, saying this anger could have been avoided or managed if the new Tonse Alliance Government had been decisive and quick enough in appointing members of the Board in a timely manner.

“They spent the first 3 month savouring victory and posing for photographs. The Board had their first meeting on Wednesday and from that harsh decisions have been taken to meet the world fuel prices on the market,” reads part of his writing on the wall.

He said the Board is mandated to authorize the rise and fall of pump prices in Malawi, it does not just wake up to dream up those prices, saying fuel prices are set globally and as of Wednesday, December 16, 2020, Brent crude oil was at 51 US Dollars per barrel.

The Malawi Energy Regulatory Authority (MERA) announced that effective Wednesday,16th December, 2020 midnight, Petrol has been increased from K690.50 to K834.60 representing 20.87 percent, Diesel from K664.80 to K826.40 representing 24.31 percent while paraffin has moved from K441.70 to K613.20 representing 38.83 percent.

MERA has attributed the increase in fuel due to landing costs and the depreciation of the Kwacha by 3.37 percent.