Government needs to be commended for keeping the promise to implement the Automatic Pricing Mechanism (APM). President Peter Mutharika pronounced the commitment through the 2025 election campaign manifesto to implement a transparent and accountable fuel management system.
The APM is a regulatory framework designed to adjust domestic pump prices in tandem with shifts in international oil prices and exchange rates. APM triggers changes in fuel prices when global oil prices change upwards or downwards and affect the landed cost of oil in Malawi by 5 percent. The same formula applies for exchange rate fluctuations within the band of 5 percent.
The Malawi Energy Regulatory Authority (Mera) announced that the pump prices for petrol, diesel and paraffin have all been reduced with effect from June 19 2026. Petrol dropped by K590 per litre, from K6 209 to K5 619, while diesel price reduced by K381, from K6 687 to K6 306 per litre. Paraffin has recorded the biggest reduction, falling by K938 per litre from K5 709 to K4 771.
MERA said the price adjustments were triggered by a decline in fuel shipping costs on the international market. Mera Board Chairperson Lucas Kondowe said the development had necessitated lower fuel prices under the APM.
The reduction comes amid easing pressure on global oil markets following reports that the United States and Iran have reached an agreement to end hostilities that had disrupted fuel supplies and pushed up oil prices worldwide. It is comforting that the global oil prices continue to fall.
Very recently, the price of crude oil per has declined from around $110 per barrel to $73 per barrel. There are further signals that the global oil prices will continue to tumble in response to the opening of the Strait of Hormuz in Iran.
An average of 20 million barrels of oil passes through the Strait of Hormuz daily. This vital water way has been closed since the war started. The water way handles approximately one-fifth of the world’s global petroleum consumption.
Majority of the oil that Malawi consumes comes from the Persian Gulf. The increased supply of oil on the global market will continue to bring down oil prices. This should trigger corresponding fuel price reduction in Malawi.
The price of oil affects the cost of living in the most significant way. Recently, Malawians have endured some of the highest fuel prices when compared with other countries in Africa and globally. Consequently, the cost of living has been unbearable with inflation rising above 30 percent between 2020 and 2025.
There were also other compounding factors that worsened inflation, such as the skyrocketing prices of food when maize would sell at K100 000 per bag of 50 kilogrammes in 2024. However, inflation has taken a declining trajectory recently after the elections in September 2025 on account of stable and reducing maize prices.
Nonetheless, the onset of the war in Iran has impacted Malawi’s inflation which is currently at 23.4 percent. Recent statistics from the National Statistical Office (NSO) shows that food inflation is rapidly declining to 17.6 percent. However, the fuel price increase is among the factors leading to a higher non-food inflation at 33 percent.
Therefore, all eyes are on agreements to end the war in Iran. The geopolitical developments should help to continue freeing the Strait of Hormuz to enable passage of increased volumes of oil. Mera should continue monitoring closely the developments in the Persian Gulf.
Recent outcomes from consultations between Malawi government and the International Monetary Fund (IMF) could be an additional source of relief if Malawi signs a deal for resumption of the IMF programme. Any additional forex that Malawi earns should support efforts to trigger the APM. Malawians deserve another fuel price reduction.
