Malawi's fuel pricing controversy has taken a new turn

Malawi's fuel pricing controversy has taken a new turn, with the Department of Road Traffic and Safety Services (DRTSS) questioning the government's decision to keep fuel prices artificially low. This move has resulted in a significant revenue shortfall for the DRTSS, with a whopping K10.2 billion missed revenue target in the 2023/24 financial year.



The issue began when President Lazarus Chakwera rejected the Malawi Energy Regulatory Authority's (Mera) proposal to increase fuel prices, citing concerns about inflation. However, this decision has had unintended consequences, including a decline in the DRTSS's revenue collection. According to the 2025 Annual Economic Report, the DRTSS collected only K7.89 billion as of November 2024, a mere 65% of the projected K12.1 billion.


Experts warn that artificially low fuel prices will drain Malawi's forex reserves and boost fuel demand, exacerbating forex scarcity. Catholic University economics lecturer Derrick Thomo suggests that the government should phase out the subsidy and implement social protection programs to cushion the impact on citizens.


The World Bank's country economist, Anwar Mussa, agrees, stating that a phased approach would protect Malawians from steep price adjustments. He also notes that the impact on inflation may be smaller than perceived, primarily affecting the richest 20% of Malawians.


As the debate continues, one thing is clear: Malawi's fuel pricing conundrum requires a careful balancing act between economic growth, inflation control, and social protection.

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