Mozambique: No change in fuel prices until late April – Watch

The Mozambican government has pledged that retail fuel prices will not rise until at least the end of April, despite the US-Israeli aggression against Iran, and the subsequent closure of the Strait of Hormuz. The Secretary of State for the Budget and the Treasury, Amilcar Tivane, gave this undertaking on Tuesday at the end of a meeting in Maputo of the Council of Ministers (Cabinet). Tivane told reporters that Mozambique currently has 85,000 tonnes of liquid fuels (including petrol, diesel, kerosene and jet fuel) stored in its oceanic terminals, which he believed would be enough to meet all the country’s needs until the end of April.

“The prices at which these goods are being sold – about 85 meticais (1.3 US dollars) for a litre of petrol and 80 meticais for a litre of diesel – will remain unchanged until at least April”, he declared. The fuel currently in the terminals was imported before the United States and its Israeli ally launched their unprovoked attack against Iran, allowing the distributors to continue selling the fuel at the same price for at least a few more weeks. Tivane admitted that 80 per cent of Mozambique’s fuel imports pass through the Strait of Hormuz, which is effectively under Iranian control and closed to international shipping.

This narrow waterway is a choke point and about 20 per cent of the world’s oil supplies pass through it. Tivane assured the journalists that the government is following the international situation closely and is preparing mitigation measures. One of the measures under study is a possible stabilisation fund that would be used to cushion the impacts of the oil crisis on the domestic market.

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“This mechanism may make it possible to compensate for eventual losses of profitability of fuel distribution companies, in a situation where prices on the domestic market might be lower than international prices”, said Tivane. In other words, the government is considering subsidising fuel companies. Tivane said the government was considering various scenarios, depending on the behaviour of the oil price.

The current price is about 88 dollars a barrel. In what Tivane described as a “moderate” scenario, the price could rise to 120 dollars a barrel, affecting the cost structure of the micro, small and medium enterprises that dominate the Mozambican economy.

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