The Malawi Energy Regulatory Authority (Mera) has said fuel demand has gone down by 15 percent as the Covid-19 pandemic continues to affect most sectors of the economy.
According to Mera Chief Executive Officer, Collins Magalasi, the drop in demand is attributed to a slowdown business and suspension of some construction projects which uses fuel-run machines.
“Demand has also gone down in Malawi. Our estimate is that demand has gone down by 15 percent, largely because construction works have slowed down,” Magalasi said.
He said the country still has sufficient fuel cover.
As of yesterday, according to Magalasi, the country had stocks that could cover for 89 days for diesel, 39 days for petrol and 99 days for paraffin.
Commenting on the situation, Economics Association of Malawi (Ecama) president, Lorraine Nyasulu, said this only indicates that Malawi is reacting to global trends where the demand has also dropped.
Nyasulu said this could lead to continued drop in prices of the commodity, which has been on a downward spiral in the past two months.
“If the current trend continues, the prices of fuel will be expected to continue going down as market forces of demand and supply are at play. The drop in demand reflects that economically, things are not alright,” Nyasulu said.
Chancellor College economics professor, Ben Kalua said this is inevitable as transport operators are protecting their businesses from the hardships of the pandemic.
He believes that even though fuel prices have dropped the siting capacity in minibuses and busses cannot give them the targeted income.
The Organisation of the Petroleum Importing Countries and allied producers advised member states to minimise fuel production because the demand globally continues to go down.
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