Page 4 - AfrOil Week 19 2020

AfrOil COMMENTARY AfrOil
Fuel prices are down, as is demand (Photo: ZooM Zimbabwe)
Fuel price cuts in Malawi,
Zimbabwe and Tanzania
Motorists in all three African states are paying less for gasoline and diesel, even as they drive less
WHAT:
Malawi, Zimbabwe and Tanzania have all reduced prices for refined petroleum products.
WHY:
The price cuts reflect the recent turmoil on world crude markets.
WHAT NEXT:
All three countries will pay less for imported fuel this year, but their savings will not stave off
THE global energy industry is still struggling to absorb the impact of the recent decline in crude oil prices. It is not having an easy time doing so, given current conditions.
On the positive side, markets have recovered some ground since April 20, when WTI futures dropped below zero for the first time ever, and demand is expected to recover somewhat in the second half of the year following the lifting of restrictions designed to rein in the spread of the coronavirus (COVID-19) outbreak. At the same time, the supply glut that helped send prices tumbling is likely to dissipate over the next few months, as major producers cut output and exports.
But on the negative side, oil companies still have plenty of reasons to worry. Plunging prices have made a mockery of revenue projections, and many operators have had to cut budg- ets, reduce the scope of their exploration pro- grammes, postpone developments and trim staff
levels in order to remain afloat.
They are hoping for better days ahead, but
they have no way of knowing when the sector might truly recover.
Nevertheless, the oil industry’s travails have an upside. That is, they offer some benefit to consumers because they make fuel cheaper. This essay will examine reactions to the recent fall in petroleum product prices in several Afri- can countries.
Malawi: another cut
Last week, Malawi’s government cut fuel prices for the second time in as many months.
Malawi Energy Regulatory Authority (MERA) announced the latest reductions
on May 6, saying that it was bringing maxi-
mum wholesale prices for gasoline, diesel and paraffin down to MWK612,060 ($832.60), MWK586,350 ($797.62) and MWK363,260 ($494.15) per 1,000 litres respectively. 
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w w w . N E W S B A S E . c o m Week 19 13•May•2020