The Centre for Social Concern (CfSC) says the recent fuel hike will put pressure on households as 60 percent of urban household budgets is spent on food and transport.
In a written response following the 33.2 percent fuel hike on Wednesday, CfSC economic governance officer, Agness Nyirongo, said many households will be forced to make painful trade-offs.
She said fuel hikes trigger higher prices across the economy and without effective policy intervention, the spiral could become self-reinforcing.
She said: “For the ordinary Malawian, the fuel hike will translate into higher minibus fares, making commuting to work or school more expensive. Families will have to stretch already thin incomes to cover the rising cost of maize and cooking oil.
“In rural areas, where poverty rates are higher, the situation may be even more dire. Farmers depend on fuel for irrigation pumps, tractors, and transporting crops to markets. Higher costs could eat into profits, discouraging production at a time when Malawi is striving for food security.”
She further noted that if inflation overshoots targets, the Reserve Bank of Malawi may be forced to tighten monetary policy by raising interest rates which could stifle investments and make borrowing more expensive for businesses and households.
Malawi Energy Regulatory Authority (Mera) has increased petrol and diesel pump prices by an average of 33.16 percent from today in a move meant to ensure “sustained fuel supply and attain cost reflective pricing”.
Following the adjustment, petrol will now be selling at K3 499 from K2 530 per litre while diesel is now fetching K3 500 per litre from K2 734.
CfSC data show that the average monthly expenses for a family of six in towns and trading centers in August stood at K910 131, up from K519 763 a year earlier.
Meanwhile, Malawi’s year-on-year inflation rate has climbed for the second consecutive month, rising by 0.9 percentage points to 28.2 percent in August 2025, driven largely by food price pressures.
Food inflation rose to 33.7 percent in August from 32.4 percent the previous month although non-food inflation remained at 19.5 percent due to relatively stable utility tariffs and fuel prices.
In recent months, transport costs have been volatile because of foreign exchange scarcity; hence, stifling business growth.
To the inflation basket, transportation costs contribute 4.1 percent. However, a rise in transport has a bearing on food, which contributes 53.7 percent, alcoholic drinks and tobacco (2.7 percent), among others.
Earlier, Business Partners Malawi International country manager Bond Mtembezeka said it is still possible to reduce inflation in the second half provided monetary policy remains tight and food supply is improved.
The Monetary Policy Committee of the RBM maintained at 26 percent the policy rate, leaving commercial banks’ lending rates as high as 36 percent, due to inflationary pressures.
