The government is in debt with the group of gasoline companies in Mozambique that no longer sees any alternative but to bring domestic prices (the lowest in SADC) in line with real prices in foreign markets. In addition, these companies fear that operations will stop in a few weeks if an urgent solution is not found because the existing stock is dwindling day by day and It only lasts until next month, nothing more.
The government owes about US$120 million to the gasoline companies operating in Mozambique for fuel import subsidies (diesel, gasoline and oil), the Mozambican Association of Oil Companies (AMEPETROL) revealed Thursday in Maputo.
"This debt is not recent and is worsened by the current international situation," said Puma Energy CEO Danilo Neves Correia.
Speaking to journalists, the President of the association and Chairman of the Board of Mitra Energy, Michel Ussene, said that this situation has frozen the ability of oil companies to become competitive for the purchase of refined crude.
"This debt situation causes companies to be negative on their cash flows and find it difficult to buy back stock and maintain their acceptable levels" said Ussene.
This disturbance to the market worsened this April "since the difference in the prices of fuel bought and arrived in the country, which we had until last month, has widened, creating an even bigger gap in the treasury of the fuel distribution companies," explained the head of the fuel distributors.
From AMEPETROL's perspective, the continuity of supply to the Mozambican market is dependent on the resolution of those two factors, the debt and the increase in that debt.
Mozambique has the lowest price on the market
The Secretary-General of AMEPETROL, Ricardo Cumbe, demonstrated on the occasion that the fuel prices practiced in the Mozambican market are out of line with international markets.
Although the last price readjustment took place just over a month ago, it will not have been sufficient, or even realistic, compared to the international market.
"If today we were to look at the real price structure of the product coming into the country, in diesel we should be paying 26.90 meticais more and 19.00 meticais more in gasoline," he said.
Currently, diesel should increase from 70.97 meticais to 97.97 meticais, and gasoline from 77.39 meticais to 96.39 meticais, according to AMEPETROL.
Comparing the diesel prices between Mozambique and Zimbabwe, the association said that for the same distance, the cost is 32.17 meticais less in the national territory. And between Mozambique and South Africa, the difference is 19.89 meticais less.
And in a comparison between six countries of the Southern African Development Community (SADC), namely Mozambique, Tanzania, Eswatini, South Africa, Zambia, and Zimbabwe, including Kenya, Mozambique is the country with the cheapest product at the gas stations.
"And this means that the price in Mozambique is out of line with the international market price and this situation impedes the ability to continue importing," according to Michel Ussene, President of AMEPETROL.
Mozambique's fuel reserves dry up next month
The factors listed above contribute to the occurrence of "drying up" of the tanks in Mozambique. And, as explained by the association, the current socio-economic situation is concentrating several countries in the world to compare fuels in the same refineries and Mozambique, currently, does not have competitive prices, i.e., attractive purchasing power.
"Those who can pay more are offering more for the product and [in the near future] there will be suppliers who will not be interested in supplying the product to Mozambique because it will not be available to pay the prices that other markets can pay," elucidated Danilo Correia.
"If the price structure in Mozambique is not revised positively, the fuel importing companies will not have the capacity to increase, increase and maintain their stock levels again. We run the risk of soon no longer having Stock," said the organization's top representative.
And, according to AMEPETROL, this alert to the Government is for the correction of this situation in order to continue the movement in the social fabric and avoid that the road, air, and sea communication systems become stagnant "as we have seen happen in other neighboring countries".
Some gas stations in Mozambique are already out of stock and others will only be able to supply fuel for a time frame of less than 30 days.
"We have about a month to be able to resolve this pricing situation," Ussene warned.
Mozambique now only has 21 days of fuel for diesel, 29 days for gasoline, and 15 days for oil.