Malawi’s Energy policy, Act mismatch spark row

Energy policy act The recent scandal caused by Mera in raising fuel prices and rescinding the decision before it was implemented has brought to light a possible lack of independence and consultation in implementing the automatic pricing mechanism (APM).

The Malawi Energy Regulatory Authority (Mera) on Friday last week reversed a 5.79 percent, 6.30 percent and 8.20 percent hike for petrol, diesel and paraffin, respectively, without giving reasons.

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

Some industry sources have blamed the discrepancy in the National Energy Policy and the Liquid Fuels and Gas Act and Regulations which they claim gives Mera unprecedented powers by ignoring a committee that was meant to sit and look into fuel pricing before being implemented.

Section 5.3 of the policy of 2003 states that the APM should be managed under a multi-sectoral Petroleum Pricing Committee (PPC) to meet once every month to assess changes in agreed parameters that constitute the in-bond landed cost (IBLC).

The committee was also meant to include non-governmental organisations such as the Consumers Association of Malawi (Cama), the Road Transport Operators Association (RTOA), the Passengers’ Welfare Association (PWA), the Malawi Council of Churches (MCC) and the Society of Accountants of Malawi (Socam).

The Reserve Bank of Malawi (RBM) and the Petroleum Control Commission (PCC), now Mera, were to act as the secretariat.

Mera seems to have been given the monopoly of fuel pricing under Section 46 (1) of the Act, which reads: “In determining the maximum price of petrol, diesel, paraffin and aviation fuels and gas, the Authority shall take into account the value of the product, the cost of haulage, the weighted cost of shortage, the sum of weighted costs for actual handling, government taxes and levies imposed on importation and the licence’s approved mark-up.”

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira said in an interview on Tuesday he used to chair the PPC for about three years, but was kicked out because of his independent opinions that were not liked.

But Cama executive director John Kapito said he does not see anything wrong with the policy and Act alignment because the authority referred to in the law was the Mera board which was independently appointed.