Minister of Finance Joseph Mwanamvekha has said the fixed fuel pricing regime implemented by the previous government was economically unsustainable and placed a heavy burden on Malawi’s finances.
He explained that the policy resulted in Malawi effectively subsidising fuel consumption in neighbouring countries, as lower domestic prices encouraged cross-border demand.
According to Mwanamvekha, the Malawi Energy Regulatory Authority (MERA) suffered significant financial losses due to the pricing structure that failed to reflect market realities.
He said MERA recorded cumulative losses amounting to K1.2 trillion as a direct consequence of maintaining fuel prices below cost-recovery levels.
The minister further revealed that the National Oil Company of Malawi (NOCMA) was also severely affected, incurring losses estimated at K963 billion over the same period.
In addition, Petroleum Importers Limited (PIL) was not spared, with Mwanamvekha stating that the company registered losses totalling K27 billion.
He also noted that levies amounting to K593.2 billion were not remitted as required, further weakening public finances and reducing available resources.
As a result of these financial shortfalls, Mwanamvekha said several development initiatives, including critical road maintenance projects, were forced to come to a halt.
