REVIEW OF LPG PRICE, DECEMBER 2017.

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 November 2017 when compared to the price observed in the month of August 2017 which formed the basis of the current retail price of LPG. The average FOB price increased by 16.53% from R8.77/kg to R10.22/kg.

EXCHANGE RATE MOVEMENT

Since the last price revision on 5th August, 2017, the Malawi kwacha has slightly appreciated against the South African Rand from K56.53/ZAR to K53.62/ZAR representing a 5.15% gain in value.

 RESULTANT RETAIL PRICE

MERA reviewed the combined effects 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 increased by 6.98%. Under the Automatic Pricing Mechanism, LPG qualified for a price adjustment since the change in landed cost is beyond the ±5% band.

The MERA Board has, however resolved to maintain the maximum retail price of LPG by using the LPG Price Stabilization Fund to cover the increase in the landed cost of LPG. The LPG retail prices have been maintained as presented below:-                    

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,076.02

               2,076.02

 0

 

 

 

 

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

 

SIGNED

 

Dr. Collins Magalasi
MALAWI ENERGY REGULATORY AUTHORITY
8th December, 2017