LIQUEFIED PETROLEUM GAS RETAIL PRICE REVIEW, MARCH 2017

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 February 2017 when compared to the price observed in the month of October 2016 which formed the basis of the current retail price of LPG. The LPG price increased by 9.20% from R9.68/kg as noted in the month of October 2016 to R10.57/kg.

 

EXCHANGE RATE MOVEMENT

Since the last LPG price revision on 4th November 2016, the Malawi kwacha has depreciated against the South African Rand from K52.90/ZAR to K56.36/ZAR representing a 6.54% loss in value.

 

 RESULTANT RETAIL PRICES

The combined effects of the movement of the FOB prices and exchange rate of the Malawi Kwacha to the South African Rand have resulted in an increase of the landed cost of LPG by 12.77%. According to the Automatic Pricing Mechanism (APM), LPG qualified for a price revision since the change in the landed cost was beyond the ±5% trigger limit.

The MERA Board therefore resolved to adjust upwards the maximum retail price of LPG effective 12th March 2017 as shown below:                    

 

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,066.27

               2,178.70

5.44

                  

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

 

SIGNED­­­­­­­­­­­­­­­

 

Rt. Rev. Dr. J.P. Bvumbwe

 BOARD CHAIRPERSON

  MALAWI ENERGY REGULATORY AUTHORITY

 11th March 2017