Fuel price hike reversed, govt had a hand

In a sudden twist of events, Malawi Energy Regulatory Authority (Mera) yesterday announced that it will not increase the pump price of petrol and diesel as earlier announced.

Mera announced on Wednesday night that due to increase of prices of petroleum products on the world market and the further depreciation of the kwacha to the US dollar, petrol would now sell at K570. 20 per litre up from K539, representing a 5.79 percent rise; diesel at K554.80 a litre up from K521.90, representing a 6.3 percent increase and paraffin for industrial use at K469.90 a litre up from K434.3, representing an 8.2 percent increase.

However, the authority’s Public Relations Officer Edward Mponda yesterday said the price hike would not be effected owing to some “technical hitches” that Mera had realized that prompted them to revert to the pre-hike price.

“The pricing has been reverted to the ‘pre-hike status’ due to technicalities in the price build up on the price that was announced in the evening of 3rd October 2012.

“Mera did not make a mistake in making the announcement, but realised that there were technical hitches which need to be looked into,” Mponda said.

When asked whether the current prices will remain for some time, Mponda said a new direction will be taken soon, but clarified that service stations are selling at the pre hike price.

“Anew direction will be given in due course. The proposed adjustment has not been effective as the recent developments indicate ineffectiveness of the proposed price changes until a new direction is provided. As such service stations are still using the ‘pre-hike’ pricing,” he said.

Last month fuel price was also raised because of the Kwacha’s performance against major foreign currencies.

However, most filling stations had no petrol leaving people to suspect that retailers were hoarding the commodity in anticipation of a further increase in prices. In Blantyre, long queues of motorists resurfaced at a few filling stations which had stocks of petrol.

There was a critical transport problem in the city such that commuters resorted to riding anything that came their way including lorries and pickups that carry bricks and cement.

Confusion also engulfed fuel selling points in Lilongwe as it was not clear what the actual price of the commodity was.

The most chaotic scene was at Chitipi Total filling station, along Mchinji road.

Earlier in the day, people started buying petrol at the new price of K570 per litre. However during the course of selling, the queue stalled after the attendants received communication to revert to the old price of K539 per litre.

“The queue was moving well until at one point it stalled. We later learnt that the attendants had been instructed by their superiors to start selling at K 539 per litre,” said one of the buyers.

Some sources claimed the filling stations had fuel supplies, but they shut down their businesses in protest against the change of the price to the old one.

Fuel companies in Malawi have been asking government to increase fuel prices so that they cart home a reasonable profit margin, but the government has refused to hike the prices.

Government officials including ministers of finance and energy could not pick their phones when called.