Mozambican economists on Wednesday (1 March) called for “transparency” and “balanced measures” to make the fuel market viable, noting that the impact of government intervention in the sector was not known.
Last week, the Mozambican Association of Oil Companies (AMEPETROL) described the situation of the sector as “dramatic,” as it is buying more expensive fuel, but there are no price updates at service stations, and the State is accumulating a debt to the companies.
Commenting on AMEPETROL’s position, Estrela Charles, an economist and researcher from the Centre for Public Integrity (CIP), a non-governmental organisation (NGO), noted that the lack of information about the incentives that the government has been offering to the economy, including the oil companies, prevented an assessment of the reasonableness of the complaints lodged by the companies.
“At the moment, the Government is unable to monitor to what extent these measures are having their due impact,” Charles noted.
The economist pointed to the reduction of Value Added Tax (VAT) from 17% to 16% and the reduction of taxes on petroleum products as decisions that should have an effect on the final price.
“We currently have the reduction of VAT from 17% to 16%, in force since 1 January, which means that the final price of fuel should have a lower price,” he noted.
Charles also criticised the “lack of transparency” in relation to the debt owed by the Mozambican state to the oil companies. This lack of knowledge prevents society from understanding whether the claims are fair or not.
Stressing that the fuel sellers are private companies that aim for profit, the CIP researcher argued that the operators in the sector are pressuring the government to lower the taxes that fall on the activity, because these charges double the final price of fuel.
In his turn, economist Elcídio Bachita argued that the posture of the oil companies is a form of pressure on the Government for greater relief of the fees they pay for their activity, even after the authorities have moved these charges in 2022.
“There are still some bottlenecks that put operators in the marketing of petroleum products at a disadvantage,” he stressed.
Elcídio Bachita advocated “balanced measures” that allow the government to continue to make revenues from collecting taxes and fees, without stifling the production sector, including fuel imports.
“The operators are doing business and need a profit margin to increase the amount of fuel they import and avoid a rupture in supply,” the economist noted.
Elcídio Bachita stressed that oil companies may have recovered slightly from losses, with the reduction of rates over the last year, but they still face high costs with the activity.
Speaking to Lusa last week, the president of AMEPETROL, Michel Ussene, argued that the government understands the “drama” facing the sector.
“We have absolute faith that the government understands our drama, that it is sympathetic and will find mechanisms to ensure that the companies continue to operate normally,” Ussene said.
