Economists say that the new fuel price adjustments, recently disclosed by the Government, will jeopardise the performance of companies due to high production costs, and that in the short term, the cost of living of Mozambicans may worsen even more.
Last Thursday (11), the Energy Regulatory Authority (ARENE) announced the new fuel prices in force in the country, where the litre of diesel rose from 87.97 meticais to 94.75 meticais, gasoline fell from 86.97 meticais to 85.49 meticais, vehicular natural gas went from 43.73 meticais to 45.16 meticais per litre and cooking gas remained at 90.01 meticais.
To Diário Económico (DE), the economist from the Confederation of Mozambican Economic Associations (CTA), José Ngale, said that the changes were not opportune as the fuel in use in the country was acquired about six months ago, when the price of a barrel of oil was rising internationally, meaning that “production costs at the time were still higher.
“There has been a reduction in the price of petrol, but diesel is still on the rise. This scenario certainly still calls into question the performance of companies. The manufacturing industry, for example, is the one that uses fuel the most and, due to these situations, has been the most affected,” explained José Ngale.
Meanwhile, for the economist from the Centre for Public Integrity (CIP), Estrela Charles, with the new prices, the government is creating a problem that will be reflected in the cost of living of Mozambicans, because the reduction of petrol is more of a political strategy.
“If we look at it, there is a seven metical increase in the price of diesel, which will make products and services more expensive due to production and transport costs. This phenomenon will happen immediately,” he said.
According to the economist, these new moves will create a catastrophe in the country, which is dangerous for the economy.
With regard to price prospects in the near future, the also CTA economist, Samo Dique, stressed that it is difficult to make a certain prognosis taking into account the situation being experienced in Europe (the war involving Russia and Ukraine), which has been determinant in fixing the price of a barrel of oil internationally.
“A short time ago we saw that the Organisation of Petroleum Exporting Countries (OPEC) had opted for a reduction, but soon afterwards there was great pressure from the markets to increase. Therefore, as long as the conflict persists, it is very likely that prices in Mozambique will always be oscillating, mainly because it is a country that imports already refined products which makes the cost even higher,” he said.
Samo Dique also added that the situation of fuel prices put the country and all Mozambicans in a delicate situation regarding public transport, proposing that changes be made to reduce fuel dependency.
“The country has huge gas reserves and, while we are not oil producers, we should start betting on vehicles that run on gas to make means and products more accessible. We should look more at renewable sources, particularly in industry, which is the sector that is most affected by the situation,” he said.
In a statement released by ARENE on the day of the price update, the institution gave assurances that the adjustment of diesel prices would not have an impact on public and semi-collective transport fares, as management instruments had been applied to ensure the protection of citizen users in relation to transport fares.
The last adjustment of liquid fuels took place in June last year. Meanwhile, cooking gas has already had two downward adjustments – one in December 2022 and another in January 2023.
