Parliament has adopted a report by the Committee on Natural Resources and Climate Changer for the Malawi Energy Regulatory Authority (MERA) to raise fuel prices, overshadowing resistance from the opposition.

The house went ahead to approve the report yesterday despite members of the opposition Democratic Progressive Party (DPP) walking out in protest, arguing the hike would negatively affect Malawians.

According to the report, Malawi is selling fuel at a loss as landing costs of the commodity are higher than what MERA agreed with importers.

The government insisted the proposal was necessary to avert a crisis in the future.

The committee’s chairperson Welani Chilenge said in the report that local fuel importers owe Mera K329.2 billion in levies.

As a result, Chilenga disclosed that MERA is failing to pay fuel importers K784.7 billion in under-recoveries (the difference between the selling price of a petroleum product and the cost of the same had it been imported and processed from the international market), a development which is affecting their financial standing.

Chilenga observed that importers were finding it had to provide better services due to a number of reasons, including the perpetual decline in the strength of the kwacha.

Nonetheless, he said the committee hopes MERA will increase fuel prices just to ensure supply stability and not to make profits.

He said his committee came up with the report after consulting MERA on the current fuel pricing and challenges being experienced in the fuel sector.

Meanwhile, the opposition still disagrees with the move.

Leader of Opposition in Parliament George Chaponda said the DPP boycotted the debate because First Deputy Speaker Madalitso Kazombo could not give the opposition the opportunity to voice out their concerns.

"What we noted is that they wanted everyone to endorse the fuel price adjustment. We did not come into this House to rubber stamp issues but to make decisions which are for the interest of Malawians," he told the media outside the chamber.

DPP spokesperson Shadric Namalomba, a member of the Natural Resources and Climate Change Committee, warned that raising fuel prices will have a negative impact on the lives of people in a country where the economy is on a decline.

On the other hand, Ntchisi South legislator Ulemu Chilapondwa of the ruling Malawi Congress Party (MCP), who supported the report, argued that increasing the pump prices now will help to avoid a huge increase in future and avert fuel scarcity.

Consumer rights body, Consumers Association of Malawi (CAMA) earlier asked MERA to respond to current economic fundamentals and hike fuel prices accordingly to avoid unnecessary fuel scarcity in the country.

CAMA Executive Director John Kapito said it was unrealistic to do business in a situation where the landing price of a commodity is higher than the selling price.

Kapito says if MERA continues to hold the price increase, importers may reach a point when they would not be able to bring in the commodity into the country, a development that may affect the economy.

Following a 30% devaluation of the kwacha late last year, the government increased the price of petrol to K2,530 kwacha per litre from K1,746 while diesel increased to K2,734 per litre from K1,920.

As of Wednesday the kwacha traded at K1751 against the US dollar but on the parallel market it is as high at K2500.