REVIEW OF PRICES OF PETROL, DIESEL AND PARAFFIN, NOVEMBER 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.

PETROLEUM PRODUCTS INTERNATIONAL PRICES

In October 2018, the average FOB prices of Diesel and Paraffin increased by 3.64% and 3.94%, respectively, while petrol FOB prices declined by 1.80% when compared to the averages obtained in the month of September, 2018 used in determining the ruling pump prices.

EXCHANGE RATE MOVEMENT

Since the last review of the In Bond Landed Cost (IBLC) of petroleum products in July 2018, the Malawi kwacha has depreciated by 0.57% trading at K738.15/USD from K733.95/USD noted in October 2018.

PUMP PRICES

MERA assessed the combined effect of the movement of the FOB prices and exchange rate of the Malawi Kwacha to the US Dollar as well as changes in local factors that determine the maximum pump prices. In considering the adjustment of pump prices, The MERA Board revised the following; the wholesale margins for oil marketing companies to maintain their financial sustainability, a provision for the adjustment of fuel retail margins to cover the retailers working capital erosion, adjustment of the road freight rates to allow transporters recover their operating costs. The MERA has also introduced a new mechanism for management of distribution margin. The new distribution margin framework will facilitate uplifts from the Fuel Strategic Reserves to depots for Oil Marketing Companies and promote increased distribution of petroleum products in remote areas.

Fuel pump prices have therefore been revised upwards effective 22nd November 2018 as presented below:  

                    

Product

Current Pump Price (MWK/Litre)

Recommended maximum pump price (MWK/Litre)

% Change

Petrol

 932.50

 990.30

6.20

 Diesel

 935.60

 990.40

 5.86

 Paraffin

 755.30

 785.00

 3.93

       

 

 All operators are required to sell petroleum products at prices not exceeding these maximum pump prices.

 

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

21st November, 2018