MERA explains reasons behind fuel price increase

By Michael Martin//MALAWI

● MERA adjusts electricity tariffs by 12 percent
● CSOs condemn fuel price hike & call for protection measures

The Malawi Energy Regulatory Authority (MERA) has defended the recent increase in fuel prices attributing the adjustment to the rising landed cost of importing fuel into the country.

Speaking at a press briefing held in Lilongwe today, MERA Acting Chief Executive Officer Dad Chinthambi said the cost of bringing fuel into Malawi has significantly increased, making it difficult for the authority to sustain supply under the previous pricing regime.

Chinthambi explained that fuel prices in Malawi had remained lower than the actual landed cost, a situation that affected MERA’s ability to meet its financial obligations.

He noted that the imbalance prevented MERA from making reasonable margins and contributing adequately to statutory funds such as the Roads Fund and other national development levies.

According to MERA, prolonged underpricing also led to increased fuel consumption as motorists from neighbouring countries took advantage of cheaper prices in Malawi.

Some traders, Chinthambi added, were allegedly smuggling fuel out of the country, worsening shortages on the domestic market.

He said these challenges made fuel scarcity inevitable, prompting MERA to finally apply the Automatic Pricing Mechanism after it had remained unused for nearly three years.

The authority believes that restoring the pricing formula will stabilize fuel availability and prevent future shortages.

MERA emphasized that the decision was not taken lightly but was necessary to safeguard national energy security.

The authority has since assured the public that it will continue monitoring fuel prices to ensure fairness and sustainability.

Alongside fuel prices, MERA has also approved a 12 percent increase in electricity tariffs, effective January 20, 2026.

Chinthambi said the increase forms part of a long term tariff adjustment plan agreed upon in 2023.

Under the plan, electricity tariffs were supposed to rise by 51 percent over a three year period.

However, MERA directed Electricity Supply Corporation of Malawi (ESCOM) to implement the increase gradually to reduce the burden on consumers.

The 12 percent adjustment, according to MERA, is critical for improving ESCOM’s operational efficiency.

Chinthambi stated that without such adjustments, ESCOM would struggle to maintain infrastructure and improve service delivery.

He also assured the public that MERA will continue to monitor ESCOM’s performance to ensure value for money.

The electricity tariff increase had initially been scheduled for September last year but was delayed due to economic considerations.

MERA believes the current increase strikes a balance between sustainability and consumer protection.

The authority reiterated its commitment to transparent regulation in the energy sector.

However, ESCOM spokesperson Pilirani Phiri has confirmed the development through a public statement released on January 20, 2026.

Phiri explained that the adjustment follows regulatory approval granted by MERA.

He said the increase is part of a structured plan aimed at restoring ESCOM’s financial stability.

According to ESCOM, years of underpricing have limited the company’s ability to invest in power generation and distribution.

The utility provider has pledged to improve service reliability as revenues increase.

Phiri acknowledged public concern but stressed that the adjustment was unavoidable.

ESCOM also urged customers to use electricity efficiently to manage costs.

The company says it remains committed to engaging stakeholders on future tariff decisions.

MERA has announced a significant increase in fuel prices following a January 2026 review under the Automatic Pricing Mechanism.

Petrol is now selling at K4,965 per litre, up from K3,499. Diesel prices have also increased to K4,945 per litre from K3,500.

MERA said the landed cost of both fuel types exceeded the five percent trigger band.

This automatically necessitated an upward price adjustment, in line with regulatory guidelines.

The authority said the move is essential to ensure uninterrupted fuel imports.

MERA also noted that fuel levies support road maintenance and rural electrification.

Without adjustments, these national programmes would face funding challenges.

The new prices took effect immediately upon announcement.

The National Advocacy Platform (NAP) has strongly condemned the 41 percent fuel price hike announced by MERA.

NAP described the increase as economic violence against ordinary Malawians.

In a statement signed by Chairperson Benedicto Kondowe and Coordinator Baxton Nkhoma, the grouping warned of worsening living conditions.

NAP said the hike comes amid multiple tax increases already straining households.

Fuel, the group argued, is a key driver of transport, food, and healthcare costs.

They warned that the increase would trigger widespread inflation.

NAP rejected claims that the hike was unavoidable under the pricing mechanism.

The organization said government has discretion to cushion citizens.

NAP has called for urgent review and relief measures.

The Human Rights Defenders Coalition (HRDC) has also urged government to act swiftly to cushion Malawians.

HRDC Chairperson Michael Kaiyatsa said the fuel hike will disproportionately affect the poor.

He suggested targeted social protection measures.

HRDC also called for support for public transport users.

Kaiyatsa stressed the need for transparency in fuel revenue usage.

He said citizens deserve to know how fuel taxes benefit them.

HRDC believes inclusive dialogue is critical at this time.

The organization warned of growing public frustration.

It urged government to prioritize people-centred energy policies.

In an interview, bus drivers operating from Nsungwi, Lilongwe have agreed on new transport fares following the fuel hike.

The fare to the main bus depot has been set at K5,000.

Passengers travelling to Shoprite will pay K4,000.

The agreed fare to Gateway Mall is K3,000.

Those heading to Mtsiliza, Mtandire, and Gulliver will pay K2,000.

Trips to Shire and Zebra locations will cost K1,500.

Drivers say the agreement aims to avoid confusion and disputes.

Passengers have expressed mixed reactions.

Some say the fares are reasonable under the circumstances.

Concerned Citizens group leader Edwards Kambanje has urged government to protect its people from economic hardship.

Kambanje said many Malawians are suffering under multiple economic reforms.

He described current policies as painful to ordinary citizens.

According to him, recovery measures should not punish the poor.

Kambanje said fuel and electricity hikes worsen household struggles.

He called for humane and inclusive economic planning.
The group wants government to listen to citizens’ concerns.

Kambanje said social dialogue is urgently needed.
He warned of rising public dissatisfaction.

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