On Sunday 13th of January 2019, Economists Association of Malawi (ECAMA) said it loud and clear that recent fuel price drop will not trigger commodity price reduction.
Malawi Energy Regulatory Authority (MERA) on 12th January 2018 declared the drop of fuel prices in response to the trend on the International market that Free on Board prices have taken. This drop comes less than a month after MERA also reduced fuel prices on December 15.
As reported by the Nyasa Times, Ecama executive director Maleka Thula said the drop in prices will help to stabilise the inflation of the country.
‘The magnitude of the pace of inflation going up will be reduced. The commodity prices will not go up. Commodity prices will be maintained, they will not go up,’ Thula explains.
According to the Nyasa Times, the statement that was dated on 11 January 2019, Mera chief officer Collins Magalasi said the energy regulatory board resolved to revise the fuel pump prices downwards after assessing the International market, exchange rate movements and the resultant impact on the landed cost of petroleum products in the country.
According to the statement, retail pump price for petrol are now MK 868.00 from MK 923.50 per litre, diesel is now MK 874.00 from MK 949.60 per litre while paraffin is at MK 710.50 from MK 781.80 per litre.
However, Consumers Association of Malawi (CAMA) executive director John Kapito has suggested that government should appoint an independent committee that can be monitoring the market when fuel prices go up or down.
Malawi adopted an automatic pricing mechanism (APM) in May 2012, this manages the pricing based on a set of key variables and their variables above 5%; in-bond landed cost of fuel, the exchange rate and world oil prices.