Tue. Mar 26th, 2019

Expert suggests pegging kwacha for stabilisation of fuel prices : As CAMA Cautions Politicians Against Politicizing Prices

By Enock Balakasi
Independent energy expert, Odala Matupa, has suggested that pegging the Kwacha is one of the many ways through which authorities in the country can control the prices of fuel and make them stable.
Matupa was speaking in Salima during a media awareness workshop on petroleum products pricing organised by the Consumers Association of Malawi (CAMA)
Malawi has recently witnessed sudden upward and downward adjustments of fuel prices, a development which worried consumers.
Fuel is traded in US dollars and according Matupa, the movement of the local currency against the dollar affects fuel prices.
He said, if necessary, authorities would consider pegging the Kwacha as was the case in the late Bingu wa Mutharika regime so that fuel prices do not go up or down willy nilly.

Kapito in the middle and some journalists pose for group photo in Salima

Beside exchange rate, other factors that determine fuel pricing in Malawi include; free on board prices and revenue.
Meanwhile Consumer Association of Malawi (CAMA) has cautioned politicians against politicizing issues of fuel prices ahead of the May 21, 2019 Tripartite Elections.
CAMA’s executive director John kapito observed that during electoral campaign, politicians make false promises concerning how they will reduce the prices of fuel once voted into power.
On the other hand Kapito faulted government for the tendency of attributing any decline in fuel prices to itself in order to gain political mileage.
Kapito said issues of fuel prices are not handled by politicians or government rather the petroleum industry itself using the trends that dictates the global oil market.
“As we are approaching elections, fuel prices at the international level do not know that Malawi is having an election, therefore anything can happen at any time so politics must be taken away from how fuel prices are done.”
He added that if it happens that fuel prices goes up or down along the way, government must always respond to any changes on the international market without any fear of losing an election.
“All the mechanics in the price build-up must be respected. I must highlight here that it is not government that buys fuel rather it is the industry that buys and puts the product on the market and the buyer which happens to be the industry itself must be able to get back its money, therefore no politics should apply.”
The workshop was organised to clear misconceptions and misunderstandings about fuel pricing in the country through the media.
Other stakeholders to the workshop included officials from Malawi Energy Regulatory Authority and Economics Association of Malawi.

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