REVIEW OF THE RETAIL PRICE OF LIQUEFIED PETROLEUM GAS (LPG), APRIL, 2019

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 FOB price for LPG declined in the month of March, 2019 when compared to the price noted in the month of September, 2018 used in determining the ruling retail price. The FOB price dropped by 15.16% from R10.49/kg as noted in the month of September 2018 to R8.90/kg in the month of March 2019.

 

EXCHANGE RATE MOVEMENT

Since the last price revision in September, 2018, the Malawi Kwacha has depreciated against the South African Rand by 4.02% from K50.22/ZAR to K52.24/ZAR.

 

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 dropped by 8.07%. Under the Automatic Pricing Mechanism (APM), LPG qualifies for a price adjustment since the change in landed cost is beyond the ±5% band.

In line with the Automatic Pricing Mechanism, the MERA Board has resolved that the maximum retail price of LPG be revised downwards effective 5th April, 2019 as presented below: -     

 

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,119.87

               2,044.22

    -3.57

     

 

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

4th April, 2019                                          4th April, 2019