By Chisomo Phiri
The Malawi Energy Regulatory Authority (MERA) has announced a sharp increase in fuel prices, with both petrol and diesel rising by over 41 percent, effective January 20, 2026.
In a press statement signed by MERA Board Chairperson Lucas Kondowe, the authority says the adjustment follows the reinstatement of the Automatic Pricing Mechanism (APM), under which fuel prices are reviewed whenever movements in key pricing parameters exceed a ±5 percent trigger band.
According to MERA, the APM had been abandoned over the past three years in favour of a fixed pricing regime.
However, the authority says the fixed system proved commercially unsustainable, leading to significant losses for fuel importers and suppliers.
“These losses resulted in the inability to import adequate petroleum products and failure to remit critical levies such as the Road Levy to the Road Fund Administration and the Rural Electrification Levy to the Malawi Rural Electrification Programme (MAREP) Fund,” reads the statement.
MERA notes that the situation contributed to the deterioration of road infrastructure nationwide and delayed the implementation of key rural electrification projects.
The regulator further says artificially low fuel prices created arbitrage opportunities for smugglers, leading to the loss of scarce foreign exchange as Malawi effectively subsidised fuel consumption in neighbouring countries.
This, according to MERA, also resulted in the depletion of the country’s Strategic Fuel Reserves.
Following a review for January 2026, the authority says the landed cost of both petrol and diesel exceeded the ±5 percent trigger threshold under the APM, necessitating an upward price adjustment to ensure continued fuel importation.
Under the new pricing structure, the pump price of petrol has increased from K3,499 per litre to K4,965 per litre, representing a 41.90 percent rise.
Diesel has gone up from K3,500 per litre to K4,945 per litre, an increase of 41.29 percent.
MERA has since warned that, by law, all fuel retailers must sell petroleum products at prices not exceeding the approved maximum pump prices.