Mozambique: Fuel company in financial trouble – AIM

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Mozambique: Fuel company in financial trouble – AIM

4:41 CAT | 18 May 2022

Mozambique’s public owned fuel company, Petromoc, is in financial trouble, owing about six billion meticais (94 million dollars, at the current exchange rate) to the Mozambique Tax Authority (AT) and to other creditors, according to a report in Tuesday’s issue of the independent daily “O Pais”.

When the Plan and Budget Commission (CPO) of the Mozambican parliament, the Assembly of the Republic, visited the Petromoc premises in Maputo on Monday, the company’s chairperson, Helder Chabisse, declared “We have a debt to the Tax Authority, estimated at about four billion meticais, and we owe a further two million meticais to other creditors”.

Chabisse added that the recent increases decreed by the government in the prices of liquid fuels have only worsened the company’s financial problems – because the price rises were not large enough, and there is a widening gulf between the import price of fuel, and the price for which fuel is sold at Mozambican filling stations.

Petromoc also has a debt to the banks, although this has declined from 13 billion meticais in 2018 to slightly more than two billion now

The financial difficulties, he said, date from August 2021. The government had “adjusted” the price of fuel, but never bringing it to the same level as world market prices.

Despite this, the Petromoc management remains optimistic. Chabisse said Petromoc has reached an agreement with the AT to pay off the debt in six years “and we have been liquidating it”.

Petromoc was no longer in the red, he added, but had positive results in 2020 and 2021. Chabisse even hoped that, in the near future, Petromoc would be able to pay dividends to its shareholders (mainly the state).

The chairperson of the CPO, Antonio Niquice, challenged Petromoc to restructure its business plan in order to ensure its financial stability.

“Clearly the company is operating on the market with a series of difficulties, imposed not only by the negative impact of Covid-19, but above all by various other factors in the international conjuncture, and in the light of these, there is a need for the company to restructure its plans”, said Niquice. He wanted to see Petromoc clear its debts, and to start producing money for the state.

Chabisse assured the reporters accompanying the CPO that Mozambique has sufficient stocks of fuel for the next few weeks, but he expected a further price rise in the near future, given the international trends.

Source: AIM