Fuel prices will not go down in Mozambique

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Fuel prices will not go down in Mozambique

3:10 CAT | 16 Mar 2020

File photo: Noticias

Prices of liquid fuels in Mozambique will not fall, despite the drastic drop in international oil prices, because of the effects of the new coronavirus pandemic (Covid-19).

Figures indicate that the barrel of oil fell in the international market from US$66 to US$33, but Mozambican Petroleum Importer (IMOPETRO) says that this will not reflect domestically soon.

In an interview with ‘Carta de Moçambique’ yesterday, IMOPETRO Director-General João Macanja explained that fuel prices in the country reflect import costs in the previous month.
And, because imports are counted from the 22nd of each month, the price of fuels discharged at the end of this month will reflect the February acquisition costs.

“We are in March, when the price of oil has dropped a lot, but the product that is currently being sold will not be invoiced at the March price, because the contract establishes that the invoicing of any product that is discharged in a given month has to be based on the prices of the previous month, in this case, the month of February,” he explained.

In addition, Macanja explained, the price of fuels internally takes the previous months’ costs into account, in which context, oil was expensive in December, January and February, and any reduction in domestic prices would be damaging to gas stations.

The IMOPETRO director-general also said that the government was still analysing the behaviour of the exchange rate. Currently, due to the impact of Covid-19, the US dollar was appreciating against the metical, Macanja noted.

But Macanja raised the possibility that the national authorities would adjust the price of fuels to reflect the current drop in the coming months.

“This reduction will be reflected when considering the March import cost. Now, this is not going to happen now. It could be next month, or in another three months. And, at that time, the price of a barrel, at the international level may be around 70 US dollars, but internally it should be lower, because we will be considering the costs of a month when the price was low,” he explained.

With maintenance, fuel prices have remained intact since August 2019. According to the latest readjustment by the National Directorate of Hydrocarbons and Fuels, diesel will continue to cost 63.51 meticais per litre, while gasoline will stay at 66.49 meticais per litre.

In the formal market, a litre of lighting oil would remain at 48.44 meticais, and 61.23 meticais for one kg of cooking gas (LPG). Compressed natural gas (CNG) will continue to cost 30.35 Meticais per litre equivalent.

Last August, IMOPETRO justified areduction in prices with the depreciation of the purchase price of fuels internationally, as well as the exchange rate stability in the national interbank market.

By Evaristo Chilingue

Source: Carta de Moçambique