Fuel prices in Mozambique set to rise

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Fuel prices in Mozambique set to rise

12:26 CAT | 21 Jan 2022

in file CoM

A barrel of crude oil on the international market has recorded its biggest price rise in the last seven years, and this is putting pressure on fuel companies, the Mozambican Association of Fuel Companies (AMEPETROL) warns. The association further claims that carriers from countries in the region are using Mozambican fuel, because it is more affordable.

Fuel prices were last updated in Mozambique in November, 2021, with gasoline rising from 62.50 to 69.94 meticais per litre and diesel from 57.45 to 61.71 meticais. At that time, a barrel of crude oil cost US$84 on the international market.

But two months later, the price of a barrel is now US$88.44 – a historic rise, according to the association that brings together the country’s oil operators.

“The current cost levels per barrel are roughly the same as they were seven years ago, in October 2014,” AMEPETROL secretary general Ricardo Cumbe says.

Read: Brent oil jumps to highest level in 7 years

The fuel price structure in the country is influenced by three factors, including the cost of importing at source, with Ricardo Cumbe noting that the price rise is already being felt in countries across the region.

“In our neighbour South Africa, today, looking at the current structure and converted at the exchange rate of 4.16 (meticais to the rand), gasoline costs 81 meticais a litre, compared to our current 69 meticais,” he notes. “There is also a difference compared to our diesel, which costs 61.70 meticais, compared to around 79 meticais in South Africa. The difference is 18 meticais for diesel and 12.5 meticais for gasoline.”

A problem arises from the fact that national fuel prices are not in line with other countries in the SADC region, Cumbe says.

“What happens is that consumers of those countries, especially those in the transport area which carry large goods, put pressure on Mozambique. We are financing [them] with our resources.”

Prices could eventually peak on the national market in about two months from now, Cumbe estimates.

AMEPETROL, which brings together 30 operators, including IMOPETRO, the Mozambican oil importer, says it is liaising with the authorities in the hope of mitigating the effects of a possible future rise in fuel prices.

By Antonio Tiua

Source: O País