CAMA asks for immediate adjustment of fuel prices to avoid its scarcity

* Scarcities of fuel, as experienced before, have serious negative economic and social effects on consumers and the economy

* Which include fuel being only found on the black market at double the regulated pump prices

* Critical services are disrupted such as distribution of goods and services and movement of people, etc

Maravi Express

Consumers Association of Malawi (CAMA) contends that Malawi Energy Regulatory Authority (MERA) has for a long time been holding back upward adjustment of fuel price which has resulted in the accumulation of heavy losses by the petroleum importers.

Thus CAMA is requesting MERA “to immediately adjust prices of fuel to avoid unnecessary impending fuel scarcities that will hurt both the consumer and the whole economy”.

“The current losses suffered by the petroleum importers are unsustainable and continue to challenge the continued importation of fuel in the country,” says CAMA Executive Director John Kapito in a public statement.

“Price increases of petroleum products negatively affect consumers because of its price trigger effect on other goods and service. However, when this is weighed against the scarcity of fuel on the market and its negative effects, CAMA believes that the effects of regulated higher prices are a better devil than fuel scarcities.

“The reasons behind the high current fuel price increase is as a result of the decision by the International Monetary Fund (IMF) to devalue the kwacha and a weaker kwacha will continue to trigger price increases especially on strategic commodities like fuel.”

Kapito emphasises that MERA’s mandate is to regulate and not to control prices of fuel and that fuel prices “must never be politicised”.

“MERA should maintain its independence and refrain from creating unnecessary challenges to both consumers and fuel importers.

“Any consequences as a result of holding the prices will hurt the consumer more. It is, therefore, economically unsustainable to continue with lower prices that are below cost and accumulating the huge losses whose debt will have to be paid by the consumer.”

Kapito further says scarcities of fuel, as experienced before, “have serious negative economic and social effects on consumers and the economy”, which include;

1. Fuel being only found on the black market at double the regulated pump prices;

2. Critical services are disrupted such as distribution of goods and services and movement of people;

3. The health sector is heavily affected as ambulances are unable to operate;

4. Goods and services become expensive because of high prices of transportation; and

5. Both small scale and big industries stop their operations.

CAMA thus demands of MERA “to immediately adjust fuel prices that are affordable and fairly compensate the fuel importers and ensure continued supply of fuel on the market”.