The Malawi Energy Regulatory Authority (Mera) is banking on new guidelines for liquid and petroleum gas (LPG) to increase uptake of gas, whose consumption, at 150 grammes per capita, is the lowest in the region.
Unlike other countries in the Southern Africa Development Community (Sadc) region, Malawi has made less strides in the sector due to public perception; thereby losing out on an important alternative energy source.
Speaking on the sidelines of a Mera media sensitisation workshop on developments in the energy sector, Mera director of liquid fuels and gas Alinafe Mkavea said the guidelines, which will be finalised by January 2018, among other things address issues of prices of gas cylinders as well as levies.
“A gas cylinder with one stove now costs an average of K60 000, which in itself is prohibitive to consumers. We are also engaging government so that it can remove some of the levies on gas to make it cheaper and easily accessible.
“But before we start pondering on increasing accessibility, we will first have to sensitise consumers to the safety of handling gas. We hope with the use of gas as an alternative energy, especially now that we are having electricity challenges, we could be able to save energy on the grid which is used mostly in homes,” she said.
In his presentation on the pricing of petroleum products, Mera senior economist (fuel and gas) Chimwemwe Dunkalo said the guidelines will help investors at all levels of business as it has been benchmarked with regional regulators.
Commenting on the ethanol fuel pricing framework, Mera director of economic regulation Eunice Potani said the authority is now working on developing competitive prices as well as reviewing some taxes and levies, which should be done by January.
According to a preliminary study conducted by audit and investment advisory firm KPMG, as compared to petrol prices now at K824.70 per litre; ethanol fuel, rectified spirit and blend costs K694.54, K600.74 and K798.51 per litre respectively at Nkhotakota-based Ethanol Company (EthCo) while the same costs K724.85, K557.00 and K804.57 per litre at Chikwawa-based PressCane respectively.
The two firms are subsidiaries of dual-listed conglomerate Press Corporation Limited (PCL).
“With the prices as in the study, what would happen if petrol prices come down? So, we needed to look at the provision of investment recovery,” said Potani.
In an earlier interview, PCL group chief executive officer George Partridge said its ethanol-driven vehicle is now on hold due to proposed price of fossil fuel which he said does not make business sense. n