Malawi Energy Regulatory Authority (Mera) says it will draw K150 million from the Price Stabilization Fund (PSF) to pay for carbon tax following the review of the payment method of carbon tax.

During the 2020/21 proposed National Budget presentations, the Minister of Finance, Economic Planning and Development Joseph Mwanamvekha revealed a new payment method which states that motorists will be paying carbon tax at K5 per litre when refueling at a filling station.

Mera chief executive officer Collins Magalasi outlined why there was need to reach out to the PSF for the development. “We needed to use the fuel stabilisation fund because if we raised fuel prices, we were going to shock the economy as it meant raising fuel prices mid-month.” said Magalasi.

On the other hand, the Consumers Association of Malawi (Cama) executive director John Kapito commended the new payment method, stating that by transferring the tax to the petrol pump, Treasury has broadened the tax base and ensured that everyone, including those without cars, are paying the tax.