Minister of Finance, Economic Planning and Decentralisation, Joseph Mwanamvekha, has revealed that Malawi’s long-standing fuel subsidy regime has pushed the country into a deep financial hole, with the Malawi Energy Regulatory Authority (MERA) now owing fuel suppliers over K1 trillion. Speaking on the latest fuel price adjustment, Mwanamvekha said Malawi imported about 504 million litres of fuel in 2019, but demand has since surged to approximately 744 million litres, placing enormous pressure on the country’s foreign exchange reserves and public finances. He said the continued underpricing of fuel had effectively turned Malawi into a subsidy hub for neighbouring countries, a situation he described as economically reckless and unsustainable.
“We have been subsidising fuel in a way that benefits other countries more than Malawians themselves. This cannot continue,” Mwanamvekha said. He said the failure has crippled funding for road maintenance, rural electrification and quality control, directly undermining national development efforts.
Mwanamvekha defended the recent fuel price hike, arguing that the adjustment was unavoidable if the government is to restore financial stability and unlock stalled development projects. “The price adjustment is painful, but it is necessary. Without it, we cannot sustain infrastructure development and basic public services,” he said.
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He added that government is working to stabilise the kwacha, while the Competition and Fair Trading Commission (CFTC) has been deployed to monitor the market and prevent unjustified price increases by traders. In a bid to cushion Malawians, Mwanamvekha said citizens will soon be able to access loans from the National Economic Empowerment Fund (NEEF), which is currently recovering funds from previous beneficiaries to restart lending. However, the revelations raise fresh concerns over years of regulatory failure, hidden debts, and the true cost of Malawi’s fuel policy, as households and businesses brace for the ripple effects of higher fuel prices across the economy. With MERA’s debt now in the trillion-kwacha range, economists warn that Malawi is paying the price for populist pricing, weak oversight and delayed reforms — a bill that ordinary citizens are now being forced to settle at the pump.
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