It is deeply troubling that petrol has increased by 96 percent and diesel by 81 percent within three months. The Malawi Energy Regulatory Authority (Mera) this week raised the pump price of petrol from K3 499 to K4 965 per litre, while diesel went up from K3 500 to K4 945 per litre, a jump of about 41 percent. The increase follows another raise on October 1 2025 when petrol rose from K2 530 to K3499 per litre and diesel from K2 734 to K3 500 per litre.
The fuel price adjustments should not be viewed in isolation. They come hot on the heels of other price increases such as the electricity tariffs (12 percent), doubled tollgate fees, a rise in value added tax (VAT) new financial transaction levies and Pay As You Earn (Paye) changes that have reduced workers take-home pay. The high fuel prices have already sparked a sharp rise in transport costs, while food prices and the cost of doing business are also expected to go in the same direction soon.
In short, the price rises are nothing but an economic onslaught on Malawians whose incomes have not changed. Of course, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha has defended the tariffs and levies saying they are part of government’s broader efforts to stabilise the country’s struggling economy. But government should not blame the huge fuel price rise on the automatic pricing mechanism (APM) it adopted in determining fuel prices.
[paywall]
APM was not made in Mars. It was formulated as a guide. Its execution should have been informed by the consequences of implementing a 96 percent price hike in just three months.
Under APM, any changes worth minus/plus five percent in the value of the kwacha exchange rate to the dollar and free on board (FOB) prices of refined petroleum products on the international market should trigger prices reviews either upwards or downwards. The 41 percent fuel price hike has come as a sudden shock to households and businesses. The fuel price increase would do more harm than good to economic stability and social welfare if not properly mitigated.
What cushioning mechanisms has government put in place to reduce the impact of the shock on the ordinary Malawians? As some have already argued, a better way of raising the fuel prices is to do so gradually. People and businesses should be able to predict when to expect the next price hike so they can also plan accordingly.
[/paywall]
