By Paul Fauvet
Maputo (MOZTIMES) – The Mozambican government has warned of possible rises in the price of fuel.
Despite the war waged by the United States and Israel against Iran, and the subsequent closure of the Strait of Hormuz, which used to carry 20 per cent of all oil and gas traded on global markets, the government has so far declined to increase fuel prices. The government is facing a shortage of foreign currency, and insistent claims that petrol and diesel are being diverted to neighbouring countries.
Prime Minister Benvinda Levi, speaking on Wednesday, in the Mozambican parliament, the Assembly of the Republic, warned that Mozambique, as a net importer of fuel, is structurally vulnerable to external shocks particularly due to its dependence on strategic international shipping routes.
“The current international situation is marked by uncertainty as to the end of the conflict in the Middle East”, she said. Rising international fuel prices would make a rise in the prices charged in Mozambique inevitable.
So far, the government has held domestic fuel prices steady. A litre of petrol at the pumps costs 83.57 meticais (about 1.3 US dollars). A litre of diesel costs 79.88 meticais (1.25 US dollars).
Prices are stable, but the supply of fuel is not. For the past fortnight, there have been long queues of vehicles at fuel pumps in the main cities, and some of the fuel stations have run out of fuel altogether. The owners of the pumps have imposed ad-hoc rationing, limiting clients to 1,000 meticais worth of fuel (about 12 litres of petrol).
The government blames the crisis in part on the shortage of foreign currency, particularly US dollars, essential for imports.
“Under normal conditions, distributors rely on dollar-denominated guarantees from commercial banks to pay for fuel shipments at ports. However, some companies have struggled to obtain such guarantees due to liquidity constraints”, according to a government explanation which admits that difficulties in the financial system are among the main operational blockages.
Faced with this situation, the government says it is preparing a package of measures to mitigate the impact of an eventual fuel price rise on households.
The Minister of the Economy, Basílio Muhate, guaranteed that stabilisation measures are being drawn up. “The government intends to use financial stabilisation measures to avoid the impact of large increases on households”, he told parliament, promising that there will be increased support for public transport.
The parliamentary debate was also marked by claims that fuel is being diverted into neighbouring countries, thus worsening the shortages inside Mozambique, and increasing the pressure on prices.
The government has categorically rejected these claims. It told parliament it is stepping up controls to avoid any illegal re-export of fuel, or speculative hoarding. (PF)
