REVIEW OF JET A-1 PRICES IN THE MONTH OF NOVEMBER 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 October, 2018 when compared to the average FOB price obtained in the Month of September, 2018 on which ruling airfield prices are based. The FOB price of Jet A-1 increased by 3.62% from USD712.61 USD/MT to USD738.42 USD/MT.

 

EXCHANGE RATE MOVEMENT

The Malawi Kwacha has slightly depreciated since the last price review of 7th October 2018 trading at K738.15/USD from K733.95/USD representing a 0.57% loss in value.

 

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 20.24% and 20.69% 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 however, noted the Price Stabilisation Fund (PSF) position for Jet A-1 and resolved to maintain the airfield prices at both airports and use the PSF to cover the expected increase in the landed costs of Jet A-1 in November 2018. Jet A-1 airfield prices have therefore been maintained as follows;

 

Airport

Current Maximum Airfield Price (Kwacha per Litre)

Recommended Maximum Airfield Price (Kwacha per Litre)

% Change

KIA

931.82

931.82

 0

CHILEKA

882.89

 882.89

 0

       

                

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

 

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

21st November, 2018