MOZAMBICAN FINANCE MINISTER SAYS FUEL SUBSIDIES NOT EFFECTIVE

MAPUTO, Mozambique’s Minister of Economy and Finance, Adriano Maleiane, has told the country’s parliament, the Assembly of the Republic, that the fuel subsidies provided by the are not an effective way of protecting the poorest and most vulnerable members of society.

Answering questions about subsidies from deputies here Wednesday, Maleiane pointed out that a generalized subsidy, whereby the price of fuel at filling stations is lower than the import price, benefited all motorists, regardless of income, including motorists from neighbouring countries, who drive over the borders to fill up with cheap Mozambican petrol or diesel.

The fuel companies buy the fuel at one price, and are then obliged to sell it at a much lower price, with the government promising to pay them the difference.

A second type of fuel subsidy cover the cheap diesel for the minibuses which provide much of the country’s urban passenger transport. Since 2008, Maleiane pointed out, licensed minibuses pay only 31 meticais (about 48 US cents) per litre of diesel although the current price of diesel at the pumps is above 51 meticais a litre.

So the state is paying 20 meticais per litre used by the minibuses, said Maleiane. This is not effective � it doesn’t reach the people the government wants to support.

A third type of subsidy is for the diesel used in agriculture and by fishing boats, which benefit from a 50 per cent reduction in fuel tax. This is very difficult to control. It’s hard to know whether the fuel is really used for agriculture or fishing, Meleiane said.

Source: NAM NEWS NETWORK

MOZAMBICAN FINANCE MINISTER SAYS FUEL SUBSIDIES NOT EFFECTIVE

MAPUTO, Mozambique’s Minister of Economy and Finance, Adriano Maleiane, has told the country’s parliament, the Assembly of the Republic, that the fuel subsidies provided by the are not an effective way of protecting the poorest and most vulnerable members of society.

Answering questions about subsidies from deputies here Wednesday, Maleiane pointed out that a generalized subsidy, whereby the price of fuel at filling stations is lower than the import price, benefited all motorists, regardless of income, including motorists from neighbouring countries, who drive over the borders to fill up with cheap Mozambican petrol or diesel.

The fuel companies buy the fuel at one price, and are then obliged to sell it at a much lower price, with the government promising to pay them the difference.

A second type of fuel subsidy cover the cheap diesel for the minibuses which provide much of the country’s urban passenger transport. Since 2008, Maleiane pointed out, licensed minibuses pay only 31 meticais (about 48 US cents) per litre of diesel although the current price of diesel at the pumps is above 51 meticais a litre.

So the state is paying 20 meticais per litre used by the minibuses, said Maleiane. This is not effective � it doesn’t reach the people the government wants to support.

A third type of subsidy is for the diesel used in agriculture and by fishing boats, which benefit from a 50 per cent reduction in fuel tax. This is very difficult to control. It’s hard to know whether the fuel is really used for agriculture or fishing, Meleiane said.

Source: NAM NEWS NETWORK