Fuel Scarcity Paralyses Malawi’s Economy

The current nationwide fuel scarcity has had a devastating impact on Malawi’s economy, with prices of goods and services skyrocketing.

ThIs has led to significant price hikes in essential commodities, including sugar (33%), cooking oils (57%), and soaps (70%). The worst affected are bus fares and transportation costs, which have risen by an average of 80%.

According to the Consumers Association of Malawi (CAMA)’s Executive Director John Kapito, market inspections have revealed that most goods have increased by an average of 50%, while transport costs have surged by 70%.

“CAMA attributes the crisis to the failure of the Malawi Energy Regulatory Authority (MERA) to implement regulated fuel price increases, despite warnings of impending scarcity.

“The association had lobbied for gradual price adjustments to avoid the current situation, which has resulted in MERA accumulating debts of over two trillion kwacha,” said Kapito in a press release.

The statement further stated that Automatic Pricing Mechanism (APM), designed to facilitate decision-making on fuel pricing, has not been utilized, worsening the crisis.

Meanwhile, the consumer rights body has called for MERA to conduct civic awareness sessions to educate stakeholders on regulated fuel procedures.

In a state of national address on Wednesday president Lazarus Chakwera says challenges to access forex have resulted in fuel supply disruption but government has started the process of transitioning from the open tender system of procuring fuel to a government to government arrangement.

“As a first step to doing this, I have accepted an invitation from the president of the United Arab Emirates to visit him in Abu Dhabi next week at his own government’s expense to discuss this and other matters for the long term fuel security of our country,” says Chakwera.

Chakwera adds that he has already constituted a coordinating committee to facilitate and execute all aspects of this process.

As the situation continues to worsen, Malawians are left to ponder whether gradual, regulated fuel price increases would have been a better alternative to the current scarcity, which has brought the economy to a standstill.