For the third time since the beginning of the year, fuel prices increased again in Mozambique. For an economist, new prices may indicate "economic interests" of individuals who influence political power.

The Mozambique Energy Regulatory Authority (Arene) announced last Friday yet another increase in fuel prices that will take effect as of this Saturday (02.07).

With the increase, gasoline, which in May cost 83.30 meticais, now goes to 86.97 meticais. Diesel, from 78.97 meticais now to 87.97 meticais and cooking gas has the biggest increase from 85.53 per kilogram to 102.2 meticais.

These increases are expected to affect the price of other basic products - such as rice, cornmeal, oil, sugar, bread and transport - in the coming days.

"Enough is enough, life is getting harder and harder"

If the latest increases in mid-May this year were already choking the lives of citizens, especially those with low incomes, with the recent increases life could get even "harder".

Citizens heard by DW Africa on Saturday (02.07) - the day the new prices come into effect - report that the cost of living is "unsustainable" for citizens living on a minimum wage equivalent to about 5,200 meticais.

Sebastião Machava is 50 years old, with five children. He works with a human traction cart known as a "tchova", and the daily profit is not enough to cover expenses for food, transportation for his children, and affirms.

"It's too much, 'enough'," he says. "See that with this 'tchova' I can only make sometimes 100 meticais a day, other times 150, but there are times that I can't even make that," Machava complains.

Florêncio Albano, 38 years old, also complains. He sells hardware in the largest informal market in Maputo, the "Xikeleni," and says he cannot make the equivalent of 50 euros a week.

"I needed to redo the math and because of that [the price increase] I don't ride the plate anymore. I have to travel 15 kilometers a day to get here and start selling the material," he said.

A semi-collective passenger carrier, who did not want to be identified, says that "the operational costs of their vehicles are lower than desired," and asks for "an immediate increase in the price of transport to the equivalent of 0.23 cents.

Measures to mitigate impacts

The economist from the Center for Public Integrity (CPI), Estrela Charles, recalls, however, that the Government of Mozambique announced a set of mitigation measures in order to mitigate the impact of the increase in fuel prices.

Among the measures announced is the reduction of both distributor and retailer margins by 15% - which is not being seen so far.

"Mitigation measures must be implemented urgently since the country is already resenting the effects of rising fuel prices internationally. In May 2022 the price of goods and services reached 9.3%," she said.

The economist believes that the non-implementation of these mitigation measures, associated with the increase in fuel distributors' margins, "may show that, on the one hand, there is a tendency for the Government to keep profits high for companies, to the detriment of the citizen" and, on the other hand, "the possible existence of economic interests in the sector by individuals with the power to influence political power," she says.

Estrela Charles believes it is urgent that the Ministry of Mineral Resources and Energy and the Energy Regulatory Authority (Arene) review the pricing structure to "reduce the items that make the final price of fuel higher."