Mozambique announces reduction of fees to mitigate rising fuel prices

Login

Register

http://www.clubofmozambique.com/

Mozambique announces reduction of fees to mitigate rising fuel prices

2:53 CAT | 16 Mar 2022

FILE PHOTO - For illustration purposes only. [File photo: Noticias]

The Mozambican government announced on Tuesday a reduction in fees, costs and other values associated with the price of fuel to “mitigate the impact of rising prices” worldwide.

The measures are part of a joint diploma by ministers of Economy and Finance, Max Tonela, and of Mineral Resources and Energy, Carlos Zacarias, “to mitigate the impact of the behaviour of prices at international level on the national economy”, the communique reads.

The document says that “the measures are in force as long as the situation of the extreme rise in prices on the international market continues”, but does not indicate what the new retail prices will be for the public in Mozambique.

The statement announces six percentage reductions:

A 5% reduction in port handling fees for diesel and gasoline;

A 60% decrease in the costs of logistical infrastructure for fuel destined for filling stations; and

A halving of costs for the Stabilisation Fund.

There is also:

A 30% reduction in the value of the margins of central storage facilities for certain fuels and petroleum products;

A 15% cut in distributor margins; and

A 15% cut in retailer margins.

It remains to be clarified what the impact of these measures will be on, and how much the consumer will ultimately pay.

The last rise in fuel prices in Mozambique took place in October 2021, when the Energy Regulatory Authority (Arene) announced increases between 7% and 22%, reflecting the rise in the price of crude oil at the time – and which has again soared with the Russian invasion of Ukraine.

The price of a barrel of Brent crude was at the time at US$85.00, while on Tuesday trading closed at US$99.00 on the London futures market for delivery in May, after two weeks above US$100.00.

In Tuesday’s statement, the government points out that, “national [fuel] operators are, in the current scenario, already registering losses, which may jeopardise the replacement capacity and continuity of supply”.

In October, the then Minister of Economy and Finance, Adriano Maleiane, said in parliament that the price increase in petroleum products implemented at that time had been below what the calculation rules deemed necessary.

If the law were to be rigorously applied, the price of gasoline “could have been 75 [meticais per litre]” instead of being increased to just 69 meticais, he said.

Petroleum products for sale in Mozambique are imported by sea through a process centralised by law in one single public entity, Imopetro, which is owned by the distributors of petroleum products operating in the country.

It is then up to Arene to determine, in accordance with calculations established by law, the retail prices to be charged throughout Mozambique.

Source: Noticias