REVIEW OF THE RETAIL PRICE OF LIQUEFIED PETROLEUM GAS (LPG) IN THE MONTH OF JULY, 2018

 

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 Free On Board (FOB) prices for Liquefied Petroleum Gas (LPG) increased in the month of June 2018 when compared to the price observed in the month of May 2018 which formed the basis of the current retail price of LPG. The average FOB price increased by 15.11% from R8.27/kg to R9.52/kg.

 

EXCHANGE RATE MOVEMENT

Since the last price revision in May 2018, the Malawi kwacha has appreciated against the South African Rand by 8.56% from K58.86/ZAR to K53.82/ZAR.

 

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 decreased by 5.51%. Under the Automatic Pricing Mechanism, LPG qualified for a price adjustment since the change in landed cost was beyond the ±5% band.

 The MERA Board resolved to revise downwards the retail price of LPG in line with the Automatic Pricing Mechanism.

 The maximum retail price of LPG has therefore been revised downwards as presented below: -     

              

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,227.34

               2,169.82

 

-2.58

 All operators are required to sell LPG at a price not exceeding this maximum retail price.

SIGNED

      Rt.Rev.Dr. J.P. Bvumbwe

 BOARD CHAIRPERSON

  MALAWI ENERGY REGULATORY AUTHORITY

 16th July, 2018