JET A-1 PRICES REVIEW, MARCH 2017

BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends in the international market oil prices and changes in other macroeconomic fundamentals in the local market and their impact on Jet A-1 prices.

 

JET A-1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet A-1 increased in February, 2017 when compared to the average FOB price obtained in the Month of May, 2016 on which ruling airfield prices are based. The FOB price of Jet A-1 rose by 20.93% from USD423.46 USD/MT to USD512.11 USD/MT.

 

EXCHANGE RATE MOVEMENT

Since the last Jet A-1 price revision in June, 2016, the Malawi Kwacha has depreciated against the United States Dollar from K715/USD noted in June 2016 to K733.50/USD as noted in March 2017 representing a 2.59% loss in value.

 

REVISED JET A-1 PRICES

The MERA Board considered the combined effects 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 Jet A-1 prices and noted that Jet A-1 qualified for a price increase. Noting the trend of Jet A-1 FOB prices on the international market, the MERA Board resolved to adjust the maximum Jet A-1 prices by only 50% of the change in Jet A-1 IBLC and further resolved to absorb the other remaining 50% through the Jet A-1 Price Stabilization Fund.

The Jet A-1 prices have therefore, effective 12th March 2017, been revised upwards as presented below;

 

Airport

Current Maximum Jet A-1 price (Kwacha per Litre)

Recommended Maximum Jet A-1 Price(Kwacha per Litre)

% Change

KIA

 720.20

   758.94

5.38

CHILEKA

 670.87

  708.78

5.65

          

All operators are required to sell Jet A-1 at prices not exceeding these maximum prices.

 

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe

CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

11th March 2017