REVIEW OF THE RETAIL PRICE OF LPG IN THE MONTH OF SEPTEMBER, 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) decreased in the month of August 2018 when compared to the price observed in the month of June 2018 which formed the basis of the current retail price of LPG. The average FOB price dropped by 34.65% from R16.05/kg to R10.49/kg.

 

EXCHANGE RATE MOVEMENT

Since the last price revision in July 2018, the Malawi kwacha has appreciated against the South African Rand from K55.16/ZAR to K50.22/ZAR thus representing a gain in value by 8.96%.

 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 declined by 25.01%. Under the Automatic Pricing Mechanism (APM), LPG qualified for a price adjustment since the change in landed cost was beyond the ±5% band.

In line with the APM, the MERA Board resolved to revise downwards the retail price of LPG. The maximum recommended retail price of LPG has therefore been adjusted effective 12th September, 2018 as presented below: -     

 

               

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,432.51

               2,119.87

 12.85

     

  

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

11th September, 2018