Monday, October 3, 2022
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President Chakwera appoints new MERA Board ahead of fuel scarcity “scare”

President Lazarus Chakwera

BY UCHIZI MBANGE

President Lazarus Chakwera on Thursday heeded expert advice and appointed a new Malawi Energy Regulatory Authority (MERA) board high-on-the-heels of a looming global fuel crisis as a result of the ongoing war in Ukraine.

The new board, to be chaired by Reckford Kampanje, is subject to approval by the Parliamentary Appointments Committee (PAC).

Other members include Innocencia Chirombo who has been retained is vice chairperson as well as Lameck Nchembe and Ulemu Kambwiri.

Secretary for Energy, Director of Energy and MRA chief executive officer are ex-officios.

Secretary to the President Zangazanga Chikhosi has said in a statement on Thursday that the appointments are subject to confirmation by parliament.

Economics Professor Ben Kalua of the University of Malawi (Unima) had warned that further delays in reconstituting the MERA board would be catastrophic for the country.

According to Kalua, “the energy sectpr has been greatly impacted by global trends and if there will be no adjustments made on the fuel pump prices now, they [adjustments will be accumulating, which is not in the best interest of everybody.”

Earlier this month MERA, released a market update statement which of indicated that he landed cost of importing fuel had surpassed the 5% mark recommended for pump price adjustment, implying a possible hike.

Mera board of directors resigned on February 27 2022 ahead of a scheduled hearing by the Public Appointments Committee (PAC) of Parliament following a request from Secretary to the President and Cabinet (SPC) Zanga-Zanga Chikhosi for their removal due to alleged poor handling of the recruitment of chief executive officer Henry Kachaje.

On March 7 2022, Mera issued an update on trends in landed costs of fuel and hinted on a fuel hike.

But Mera said no decision can be made based on the changes in the variables that trigger price adjustment due to the absence of the board of directors.

For five months now, Mera has maintained pump prices after an assessment of free-on-board (FOB) prices, the kwacha exchange rate against major trading currencies and changes in local factors.

This is despite fuel prices on the international market increasing, which has now been worsened by the Russia and Ukraine conflict.

In its update, Mera said that since the establishment of the ruling maximum prices in October 2021, the landed costs of petrol, diesel and paraffin have increased by 16.16 percent, 24.67 percent and 24.71 percent, respectively. Price adjustments are triggered by minus/plus five percent change in the variables.

According to the BBC, fuel price increase on the global markets will have a massive effect on prices of commodities in individual countries.

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