Following the Reserve Bank of Malawi’s (RBM) devaluation of the kwacha from K1 180 to K1 700 against the US dollar, fuel prices and electricity tariffs have been adjusted upwards effective today.
In two separate statements released in the wee hours of Friday, the Malawi Energy Regulatory Authority (MERA) has increased upwards petrol price from K1746 to K2530 per liter, representing a 44.90 percent price change while diesel is now K2734 from K1920 per liter representing 42.40 percent and paraffin will be trading at K1910 from K1261 representing 51.47 percent.
MERA has also increased the average electricity tariffs from the current K123.26 per kWh to K173.70 per kWh effective today.
“MERA undertakes monthly reviews of ESCOM’s electricity tariffs through the Automatic Tariff Adjustment Formular (ATAF) to assess the impact of economic fundamentals of the exchange rate and Consumer Price Index (CPI) on ESCOM and other licensees’ business.
“In August 2023, the Authority approved and granted ESCOM a 50.8% base tariff increase for the period 2023 to 2027. The first-year tranche of 18% which became effective on 1 September 2023 moved the average tariff from K104.46/kWh to K123.26/kWh. At the time of this tariff increase, the exchange rate was at MK1,126.77/US$ while the consumer price index (CPI) was at 141.6.
“Since then, the exchange rate has moved to K1,700.00/US$ as announced by the Reserve Bank of Malawi on 8 November 2023, while the CPI has increased to 146.4 as noted in September 2023. Applying these economic fundamentals to the automatic tariff adjustment formula (ATAF) results into a 40.92% tariff increase.
“Based on ATAF principles, tariffs are adjusted when the outcome is beyond ±5% trigger threshold. In view of the above ATAF outcome, the average electricity tariffs have been adjusted from the current K123.26/kWh to K173.70/kWh effective 10 November 2023,” reads a statement signed by MERA board chairperson Reckford Kampanje
