REVIEW OF JET A-1 PRICES IN THE MONTH OF OCTOBER 2018

BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends of the oil prices on the international market and changes in other macroeconomic fundamentals in the local market and their impact on Jet A-1 fuel prices.

 

JET A-1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet A-1 increased in September, 2018 when compared to the average FOB price obtained in the Month of June, 2018 on which ruling airfield prices are based. The FOB price of Jet A-1 increased by 5.53% from USD673.20 USD/MT to USD710.43 USD/MT.

 

EXCHANGE RATE MOVEMENT

The Malawi Kwacha has remained stable since the last price review of 17th July 2018 trading at K733.95/USD.

 

Jet A-1 PRICES

The MERA Board considered the combined effect of the movement of the Jet A-1 FOB prices and exchange rate of the Malawi Kwacha to the US Dollar as well as changes in local factors that determine the Jet A-1 prices. The Board noted that the Jet A-1 landed cost increased by 16.27% and 16.64% at Kamuzu and Chileka International Airports, respectively. Under the Automatic Pricing Mechanism, Jet A-1 qualified for an upward price adjustment since the In Bond Landed Cost (IBLC) changes went beyond the ±5% band at both airports.

The Board has observed a steady increase of Jet A-1 FOB prices on the international market overtime and noting the need for importers to fully recover their costs to ensure sustained flow of Jet A-1 into the country, the Board has resolved that airfield prices of Jet A-1 be revised upwards effective 6th October 2018.

Jet A-1 airfield prices have been revised upwards as follows:

 

Airport

Current Maximum Airfield Price(Kwacha per Litre)

Recommended Maximum Airfield Price(Kwacha per Litre)

% Change

KIA

 829.95

931.82

 12.29

CHILEKA

780.92

882.89

13.06

       

              

All operators are required to sell Jet A-1 at prices not exceeding the recommended maximum.

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

5th October, 2018