By Noel Mkwaila
Copyright capitalradiomalawi
Economists are speaking in support of a decision by the Malawi Energy Regulatory Authority (MERA) to increase fuel prices.According to a statement from MERA, petrol is now selling at 3,499 kwacha per litre, up from 2,530 kwacha, while diesel has risen to 3,500 kwacha per litre from 2,734 kwacha.Reacting to the development, Malawi Economic Justice Network executive director Bertha Lipipa-Phiri believes the adjustment will help Capital Hill to generate adequate revenue and ensure steady fuel availability on the market.Lipipa-Phiri further suggested that the additional revenue generated from the adjustment could be channeled into funding essential public services, while also improving the efficiency and availability of fuel on the market.“We expect to see efficiency, we all have availability of forex, and other challenges that we are characterizing, the availability of fuel shortage, should be able to be trapped, to be dealt with, with that decision. But also what it means essentially, it is progressing to improve the revenue generation of the country. There will be additional revenue, by government I guess, which can be used to fund some other public services,” Lipipa-Phiri explained The Consumers Association of Malawi (CAMA) also commented on the issue warning that the recent sharp rise in fuel prices will trigger widespread increases in the cost of goods and services, worsening the economic hardships facing Malawians.CAMA boss John Kapito argued that the Malawi Energy Regulatory Authority (MERA) and government should have implemented gradual adjustments over time rather than allowing a sudden jump, which they say will significantly strain consumers’ livelihoods.According to Kapito, they had earlier advised both government and MERA—about nine months ago—to adopt a phased approach after observing that fuel prices were being subsidized. They warned then that failure to act would leave consumers vulnerable to a future shock.Kapito said: “As we had suggested, when you have gradual increases, that does not really hurt consumers, but this one is so huge to the extent that it is going to trigger huge increases on the market, both goods and services, and that definitely will have a huge effect on the livelihoods of Malawians.
We had requested the mayor and the government some nine months ago to start gradually increasing the prices when we noted that they were giving the prices at a lower cost or rather subsidizing, and we said this is going to affect consumers if they do not implement gradual increases.”Malawi is listed among the 10 African countries with the highest petrol prices, selling above the global average of $1.33 (about K1, 456.35) per litre, according to data from Global Petrol Prices, a platform that tracks fuel costs worldwide.Business Insider Africa, citing figures from the site, notes that the rising pump prices are being driven by a mix of factors, including geopolitical tensions, global supply and demand shifts, and other market variables.
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