Mozambique Oil & Gas: Petrol and diesel up, gas and kerosene down

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The Mozambican government on Wednesday announced increases in the price of petrol and diesel, but a decline in the price of kerosene and butane cooking gas, all taking effect as from Thursday.

Speaking at a Maputo press conference, Moises Paulino, the National Director of Fuels and Hydrocarbons in the Ministry of Mineral Resources and Energy, said that the price of a litre of petrol rises from 65.01 to 66.03 meticais (from 1.08 to 1.1 US dollars), an increase of 1.6 per cent.

The price of diesel rises by three per cent, from 61.11 to 62.92 meticais a litre. But the price of kerosene falls slightly, from 50.45 to 50.33 meticais a litre, a decline of 0.2 per cent.

The major change is in the price of cooking gas (butane or LPG), which falls by 6.5 per cent, from 65.18 to 60.94 meticais a kilo.

The government reviews fuel prices every month, and changes them, if the cost of importing fuel, expressed in meticais, has risen or fallen by more than three per cent. The determinant factors in this calculation are the world market price of refined fuels, and the exchange rate of the metical against the dollar, the currency in which fuel imports are denominated.

Paulino said that the diesel used in key sectors still enjoys a subsidy. Those sectors are agriculture, artisanal fishing, electricity generation in isolated places not connected to the national grid, and passenger transport.

Paulino confirmed that the owners of the minibuses used for much of Mozambique’s urban passenger transport (known colloquially as “chapas”) still obtain their diesel for 31 meticais a litre, less than half the full price. The government pays the difference.

He insisted that the subsidy for the chapas is being phased out as the government imports new buses, sold at favourable prices to private businesses.

Joao Macanja, the general director of Imopetro, the body formed by the various distribution companies to import liquid fuels, told reporters that the next price rises are likely to be steeper.

The benchmark Bench Crude was quoted at 78 dollars a barrel on Wednesday, the highest price since 2014. The rise in the oil price shows no sign of stopping, and some analysts fear it will reach 100 dollars a barrel. This will inevitably lead to significant price rises in consumer countries such as Mozambique.

Macanja blamed the rise on uncertainties in the world market, resulting from factors such as the civil war in Syria, the crisis in Venezuela, and the widely condemned decision of US President Donald Trump to pull out of the nuclear agreement with Iran.Source: AIM

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