The Confederation of Economic Associations-CTA said today in Maputo that there is no solution, in the short term, to minimize the impact of the escalating fuel prices in Mozambique given the international situation.

"There is no solution to stop the rise in fuel prices in the country. There is no one to blame, because in fact it is an international dynamic, and the price is not an issue that can be managed at the level of a country like Mozambique," said, the Chairman of the Mineral Resources and Energy portfolio in the agremiation.

Simoni Santi explained that the conflict in Eastern Europe, coupled with underinvestment in the oil sector during the covid-19 pandemic and pressure from environmentalists for an energy transition, is causing Europe to look for new fuel suppliers, so this process also directly impacts the price increase for the end consumer.

Europe has reduced its production "and at the moment, the strongest markets are those that are in charge. And Mozambique has no power to decide what price to apply because that decision is taken at the international level," he told journalists at the CTA headquarters.

In fact, the costs of importing refined crude products at the base are getting more and more expensive. As recently as August of this year, the import of a ton of fuel could reach around $1,400, and is currently at $1,200, after being traded at $800.

The President of Mineral Resources and Energy also noted that "the liberalization of the market" for the entry of more operators, i.e., the opening of more gas stations, "is a risk to the country and endangers the market. All told, "this could put at risk the jobs of around 60 thousand people in the sector".

"The country is not prepared to have a completely free market and this can cause the fuel price dynamics to skyrocket as well," he explained, warning that "at first it may seem like a good business, but in the medium term it can lead to unemployment."

The worst is coming....

According to the businessmen, the fuel price increase is always unpredictable and inevitable. In the case of Mozambique, it is still not adjusted to the reality of the purchase price in the international market, and "at the level of the countries in the region, it is still artificially low.

"All the operational costs are aggregated to the figure of the dealer, which is actually the central stockist, who saw his profit margin being reduced to 30%," said the President of the Fuel Dealers Association of Mozambique, Nelson Mavimbe.

The profit margin of fuel dealers used to be seven meticais per kilo, but with the 30% drop it is now between four and 4.90 meticais per kilo.