REVIEW OF THE RETAIL PRICE OF LIQUEFIED PETROLEUM GAS (LPG) IN THE MONTH OF SEPTEMBER 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 August 2019 when compared to the price noted in the month of June 2019 used in determining the ruling retail price. The FOB price has dropped by 22.62% from R11.45/kg as noted in the month of June 2019 to R8.86/kg in the month of August 2019.

 

EXCHANGE RATE MOVEMENT

Since the last price revision in July 2019 the Malawi Kwacha has gained against the South African Rand by 13.94% from K56.36/ZAR to K48.94/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 21.93%. Under the Automatic Pricing Mechanism (APM), LPG qualified for a price adjustment since the change in landed cost was beyond the ±5% band.

In line with the Automatic Pricing Mechanism, the MERA Board resolved to revise downwards the retail price of LPG as follows:     

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,291.82

               2,048.56

 

-10.61

     

 

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

 

SIGNED

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

BOARD CHAIRPERSON                                  CHIEF EXECUTIVE OFFICER

9th September, 2019                                      9th September, 2019