Mozambique’s government to subsidize fuel companies to compensate for rise in fuel prices

5 August 2009

Maputo, Mozambique, 5 Aug – The government of Mozambique promised on Tuesday to subsidize fuel companies to prevent a hike in fuel prices in the country, where fuel prices have remained frozen since March, despite the rise in fuel prices on the international market.

There has been a fuel shortage in Mozambique in recent days, which the government attributes to alleged pressure from fuel companies to raise the price.

Speaking in Gaza in southern Mozambique, at the Energy Ministry’s Coordinating Council, energy minister Salvador Namburete said that the Government would compensate the fuel sector’s operators for losses incurred by the price freeze.

“Subsidizing the fuel companies is the only option to ensure normal fuel distribution,” said Salvador Namburete.

The last time Mozambican authorities intervened on fuel prices was in March this year, when the price of petrol was fixed at 23.1 meticais (0.59 Euros) per litre, diesel at 22.45 meticais (0.58 Euros) and Kerosene at 15.58 meticais (0.40 Euros).

In 2007, the Mozambican government had to subsidize semi-public transport companies to lower ticket prices, after a public uprising which resulted in five deaths and damage to property. (macauhub)