REVIEW OF THE RETAIL PRICE OF  LPG IN THE MONTH OF DECEMBER, 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) increased in the month of December 2018 when compared to the price observed in the month of September 2018 which formed the basis of the current retail price of LPG. The average FOB price increased by 14.29% from R10.49/kg to R11.99/kg.

 

EXCHANGE RATE MOVEMENT

Since the last LPG price revision in September 2018, the Malawi kwacha has depreciated against the South African Rand from K50.22/ZAR to K54.76/ZAR representing a loss in value of 8.04%

 

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 increased by 19.74%. Under the Automatic Pricing Mechanism (APM), LPG qualified for an upward price adjustment since the change in landed cost was beyond the ±5% band.

The MERA Board considered the balance in the Price Stabilization Fund for LPG, and resolved to maintain the retail price of LPG as implemented on 12th September 2018 and cover the expected increase in the landed costs for LPG in December 2018 through use of the LPG Price Stabilization Fund.

The maximum retail price of LPG has therefore been maintained as presented below: -     

 

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

 2,119.87

2,119.87

 0

     

 

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

 

SIGNED

 

                                                                     

Rt. Rev. Dr. J.P. Bvumbwe                                    Dr. Collins Magalasi

BOARD CHAIRPERSON                                         CHIEF EXECUTIVE OFFICER

14th December, 2018                                           14th December 2018