War helps boost an African nation’s gas price over $14 a gallon

Malawi raised its petrol price to 6,672 kwacha ($3.86) per liter, more than three times what US drivers are fretting over having to pay at the pump as oil surges due to the Iran war. That would be about $14.61 a gallon, the more common measure of fuel used in the US, where regular gasoline is about $4.08 a gallon, according to the American Automobile Association. The southern African nation was already second in Globalpetrolprices.com’s ranking of the world’s most expensive gasoline before the latest adjustment by the regulator on Wednesday set prices 34% higher.

The challenges Malawi already faced, that grow more acute with the effect of the Iran war on global markets, are shared across the region. The country has grappled with mounting debt and dollar shortages that strained fuel supplies and added to pressure on its local currency. The Malawi Energy Regulatory Authority, which has blamed skyrocketing fuel on a fixed pricing regime that resulted in trading losses and inadequate supplies, boosted the petrol price almost 42% in January.

The regulator ruled out cutting some levies and taxes, according to local publication Nation Online. Malawi’s stabilization fund, used to soften price changes, is in debt and could take almost five years to clear, the paper reported a MERA official as saying. Many of the measures that grew problematic for Malawi are being utilized by other states on the continent to ease pump prices. South Africa and Namibia are cutting levies, while Mozambique has allowed the set fuel price to remain at a low level.