Forum for National Development asks new MERA Board to remove court injunction against Ombudsman

Forum for National Development’s national coordinator, Fryson Chodzi

* You have an enormous task to bring back the confidence of the public towards MERA

* What the previous board did was wrong and an abuse of office in stopping the Ombudsman

* She was carrying out the constitutional mandate in order to protect an individual

By Duncan Mlanjira

Forum for National Development has asked the new board of the Malawi Energy Regulatory Authority (MERA) Board to remove the court injunction which the previous board obtained against the Ombudsman not to publish a report on the findings of the recruitment of the chief executive officer, Henry Kachaje.

The previous board of directors, led by Times Group managing director Leonnard Chikadya, was fired following an inquiry made on February 18 by Parliamentary Public Appointments Committee to Government as regards to the “poor handling of recruitment” of Kachaje.

A letter from Forum for National Development’s national coordinator, Fryson Chodzi — while congratulating the MERA Board on their appointment, saying they “have an enormous task to bring back the confidence of the public towards MERA” — says “what the previous board did was wrong and an abuse of office in stopping the Ombudsman in carrying out the constitutional mandate in order to protect an individual”.

“You must note that there are already constitutional provision of redress in the high court available if one wishes to challenge the determination of the Ombudsman.

“We believe and trust that your Board will act accordingly and be assured of our utmost support,” said Chodzi in the letter copied to chairperson of the Public Appointments Committee of Parliament and the Ombudsman herself, Grace Tikambenji Malera.

Chakwera appointed Reckford Kampanje as MERA Board chairperson and Innocencia Chirombo as the deputy with Lameck Nchembe, Charles Kambauwa and Ulemu Kambwiri as ordinary members while ex-officios are Secretary for Energy, Director of Energy and the MERA CEO.

The previous Board had Chikadya, Thokozani Chimkono, Pemphero Likongwe, Lameck Ntchembe and Alexandr Kalanda.

The new Board is also tasked to review some of the levies attached to fuel such as Road, Malawi Rural Electrification (MAREP) and Malawi Bureau of Standards (MBS) CESS.

In a statement made last month to Clerk of Parliament, Consumer Association of Malawi (CAMA) the removal of some of the levies would help reduce pump prices, saying if removed could lead the price of petrol at K950.00 per litre and diesel at K931.00 per litre.

The current prices set last October are at K1,150/ltr from K899.20, diesel at K1,120/ltr from K899.00 and paraffin at K833.20/ltr from K719.60.

CAMAs executive director, John Kapito argued that the Road Levy was introduced some years back to assist in the construction and rehabilitation of our roads and at a time when systems and mechanisms were not established within relevant institutions.

But now that there is a full Road Regulatory Authority — specific for road construction and rehabilitation — Kapito argued that the road levy tax should be transferred to this “appropriate authority bearing in mind that the Road Authority has just introduced the Toll Gate Tax whose purpose is similar to that of the Road Levy and it is unfair to punish Consumers with double taxation for the same type of service or product.”

The other levy targeted is for MAREP, which CAMA observed that it has been part of the Petroleum Price Build up for a long time, which was intended to develop rural electricity connection infrastructure with hope to improve rural electricity access — which should be transferred to electricity distribution or generation.

CAMA also targeted the MBS CESS is “another levy loaded on fuel prices and intended to provide quality assurance of our fuel” but yet “it is common sense that the quality of Petroleum Products can only be inspected and assured before shipment and, therefore, the role of the Malawi Bureau of Standards to inspect and assure quality of fuel into the country is [redundant]”.

Thus Kapito maintained that if these levies were removed then, the current prices of the petroleum products at the fuel pump would have  approximately been at K950.00/ltr for petrol and diesel at K931.00/ltr.

The MERA Board plays a crucial role in determining fuel prices in the country under the recommendation of MERA’s Liquid Fuels & Gas Pricing Advisory Committee after evaluating trends on the Automatic Pricing Mechanism.

The Committee meets every first Tuesday of the month to review the Automatic Pricing Mechanism before submitting its recommendations to the MERA Board and within 48 hours, the Board is supposed to make a resolution on the Committee’s recommendations, as provided in the Liquid Fuels and Gas (production and supply) Regulations, 2009.

The Law provides for a Price Stabilisation Fund (PSF) at 5% of in-bond landed cost (IBLC) in which prices are reviewed upwards if the change in IBLC is above 5% and downwards if it is below 5%.

Then when the change is below 5%, the difference is channeled into the Price Stabilisation Fund to cushion fuel prices should there be an increase within the -5% benchmark.