By Steven Godfrey Mkweteza
The Consumers Association of Malawi (CAMA) has commended government for implementing the price stabilization fund (PSF), which it said, has resulted in a downward spirals of petroleum prices in the country amidst covid-19 pandemic.
Executive Director for the consumer’s rights body, John Kapito, made the sentiments when updating the media in Blantyre on the trends on petroleum pricing in the midst of Covid-19.
Kapito said currently, consumers could have been paying more for the pump fuel prices since the emergence of the Covid-19 pandemic in the country in March this year but that they were cushioned by the PSF facility.
Among others, Kapito attributed weak kwacha currency and low demand for the petroleum products on the global markets as some of the factors that influenced the free on board (FBO) price trends.
However, Kapito said the consumers should brace for the tough times as the Covid-19 mitigating measures would necessitate an adjustment in the prices in recent times.
‘’ There is need for the country to apply other means so that when the fuel fund is depleted, consumers should be able to be cushion by the recent developments on the Covid-19 mitigation measures and that the demand on the global market is now starting picking high due to resumption of activities,’’ said Kapito
Kapito further noted that it was likely that the petroleum prices would start increasing when the board for Mera is instituted as it is mandated to determine the prices on the market.
“The vacuum on the board has also done good justice to the consumers because in the absence of it, you cannot adjust the prices. However, the new boards will likely going to react to the current economic fundamentals and likely adjust upwards the prices,” Kapito said.
According to the public relations manager for the Malawi Energy Regulatory Authority (Mera), Vitima Khonje, the price stabilization fund (PSF) was established way back for controlling the emerging prices if need be.
She said when the movement of petroleum prices was within 5% of the in bond landed cost (ILC), that’s only when the fund stands.
She further revealed that since July this year, the prices of the fuel started going up on the market trends but the authority have been using the fund mechanism to cushion the consumers.