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Fuel price hike reversed in Malawi

In a surprise turn of events, Malawi Government on Thursday reversed a fuel price hike just hours after it was implemented, a move the Consumers Association of Malawi (Cama) has described as suspicious and political.

The development effectively retains old fuel prices which were hiked by 5.79 percent, 6.30 percent and 8.20 percent for petrol, diesel and paraffin, respectively.

Petrol, diesel and paraffin (industry) briefly went up from K539, K521 and K434.30 per litre to K570.20, K554.80 and K469.90 per litre, respectively.

Malawi Energy Regulatory Authority (Mera) chief executive officer Dr. Allexon Chiwaya on Thursday wrote all stakeholders advising them on the changes.

He did not give reasons for the reversal, but said Mera will communicate shortly on the resumption of the revised fuel pump prices once the matter is resolved.

And in a statement issued on Wednesday evening, Mera chairperson Laiton Zinyemba said pump prices of petrol, diesel and paraffin had been revised upwards in line with the automatic pricing mechanism (APM).

But Cama executive director John Kapito said the reversal raised eyebrows because it is not clear whether it was effected in fear of public reprisal or whether it indeed supported economic fundamentals.

Said Kapito: “This government does not know how to separate politics from economics. This decision was made in a political room by someone who realises that such price hikes are digging his or her own grave. They are simply trying to postpone their burial when practically they are already dead.”

In a related development, Reserve Bank of Malawi (RBM) Governor Charles Chuka on Wednesday evening told journalists in Lilongwe there is no need to panic over fuel shortages that have hit the country in recent weeks because the situation is not as precarious.

Chuka, who was briefing business journalists under the Association of Business Journalists (ABJ) banner, said there were some logistical challenges that caused the recent shortages. (With additional reporting from MABVUTO BANDA, Lilongwe Bureau Chief).

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