Mozambique: Fuel prices expected to fall in October – minister

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Mozambique: Fuel prices expected to fall in October – minister

5:20 CAT | 19 Sep 2022

File photo: Lusa

The Mozambican government announced in Maputo this Friday that it expects fuel prices to fall in October this year.

These expectations, according to Finance Minister, Max Tonela, are based on current downward trends of the cost of a barrel of oil in the international market.

“We forecast that in October and, probably, November we may cut down the prices of liquid fuels in Mozambique and, in this way, influence inflation which will improve the capacity of families to buy goods and services,” Tonela said.

The minister was speaking at a Maputo press conference to take stock of the activities carried out by an international Monetary Fund (IMF) Evaluation Mission on the performance of the Mozambican government in implementing programmes aimed at consolidating the country’s macroeconomic stability and improving public finances management.

“Our forecast is for stabilisation of fuel prices in the international market due to a downward trend. Prices peaked at 120 US dollars a barrel and are currently trading around 94 to 95, US dollars”, explained the minister.

The rise of fuel and food prices has pushed inflation to 11 per cent, against the 07 per cent projected for this year. “This stems from exogenous factors to our economy,” Tonela said.

For his turn, IMF’s Chief of Mission, Álvaro Piris, said the war in Ukraine has pushed prices in the international market, particularly fuel and food which is “a challenge for the whole world.”

The same source says that even the most powerful countries are facing the challenge caused by rising inflation.

“For Mozambique this challenge comes on top of a number of shocks such as the Covid-19 pandemic, cyclones, among others. However, it is important to stress that Mozambique managed to maintain macroeconomic stability during all these years of challenges and our assessment points out that the authorities have dealt with these challenges in the right way. They have managed to do the same in relation to the challenge posed by the war in Ukraine,” he added.

In terms of the package of measures to stimulate the economy announced recently by Mozambican President Filipe Nyusi, the head of IMF mission said, “our assessment is also positive and that policies adopted fit well with our support and aim to help the growth of both economy and private sector.

“These measures will have an impact on business and business environment in the country,” noted Piris, who expects Mozambique’s economic growth to reach 3.8 percent this year.

According to Pires, “we are looking at macroeconomic stability in the country due to good management by the government, despite the prevailing challenging situation.

“We expect more successes in the months ahead,” he said, adding that for now the assessment concluded that it was not necessary to strengthen the financial package to support Mozambique in facing the challenges posed by higher fuel and food prices.

In April this year, the government signed an agreement with the IMF to implement a programme to strengthen the country’s macroeconomic stability and improve the management of public finances.

Under the agreement, the government made a number of commitments, some quantitative and others qualitative, with targets to be met over defined periods of time and subject to monitoring and evaluation process by the IMF.

Source: AIM