Mozambique: Government prepares measures to cut fuel prices

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Mozambique: Government prepares measures to cut fuel prices

1:27 CAT | 14 Oct 2025

FILE - For illustration purposes only. [File photo: Rádio Moçambique]

The Mozambican government wants to cut the fuel price by at least one metical (€0.02) per litre, by reducing the stabilization component and changing import logistics costs.

The measures are included in the Economic Recovery and Growth Plan (PRECE) approved by the government and recently made available by the Ministry of Finance. They aim, it says, “to mitigate the cost of living and improve the purchasing power of vulnerable families”.

The Energy Regulatory Authority (ARENE) reduced fuel prices in Mozambique on 19 June, with petrol falling from 85.82 to 83.57 meticais (€1.13) per litre and diesel from 86.79 to 79.88 meticais (€1.08).

“For this purpose, the measures will be combined with fiscal actions, price control and registration of basic service suppliers. With a view to mitigating the cost of living and improving purchasing power for the population, PRECE proposes a revision of the current fuel price structure and other essential products,” the document states, estimating “a reduction in the cost of petrol and diesel of about one metical per litre”.

“With a multiplier effect throughout the production chain that has these two types of fuel as one of its production factors,” it adds.

The measures focus on three components, such as taxes, with emphasis on the reduction of the Port Handling Fee – from 0.86 to 0.43 meticais per litre – as well as a reduction from 3.5 to 3 meticais per litre in the Stabilization Component, the Central Storage Facilities Margin and bank charges.

For the government, the reduction on current consumer price levels has “the potential for broad positive effects on the cost of living, transport costs and inflation”.

“The magnitude of the reduction shows that an integrated, technical and phased revision policy is feasible and effective,” it argues.

READ: Mozambique: Government to review fuel price structure to reduce cost of living

According to PRECE, the Mozambican government plans to mobilise US$2.75 billion (€2.368 billion) in the short and medium term to stimulate the economy, particularly in view of the effects of climate change and political instability.

Source: Lusa