The exponential rise in oil prices in the international market is putting pressure on the survival of companies engaged in the commercialization of fuel in Mozambique.
As the newspaper Notícias reports, available data indicate that in February 2021, for example, a barrel of oil was traded at $62.28 and reached its peak in October 2021, when it cost $83.75, which are considered the highest values in the last seven years.
Since last January, the oil market has seen a sharp rise in prices with a barrel of oil averaging $85.57 a month and in the first 9 days of February it traded at an average of $91.15 and is expected to reach $100 in the coming days.
Analysts believe that the economic impact of covid-19, Omicron, will be short-lived and the countries' economic recovery will cause demand to increase in the coming quarters.
They add that this increase in demand more than anticipated and that OPEC's supply may not grow at the same pace crude oil prices pressure fuel bills, consequently prices will trend upward in the international market.
On the other hand, the geopolitical tensions due to Russia's military activity on the border with Ukraine raises the risk of oil as a commodity and this geopolitical situation is influencing the rising price of a barrel of crude oil on the international market.
The prevalence of this situation in the international market will have a direct impact on the purchase and import of oil products to Mozambique, as companies will need more financial resources in order to be able to rotate stocks of oil products.
As a matter of fact, the actual price has been above the value currently in effect. In terms of the financial sustainability of the operators, these negative differences imply losses for the industry, since the retail price does not cover the costs with imports and does not guarantee the sustainability of the companies.
As a consequence, analysts warn that, in the long run, a reduction in the attractiveness of the activity may occur, thus influencing investments in the fuel sub-sector.