MOZAMBIQUE CAN’T AFFORD GENERAL FUEL SUBSIDIES COVERING ALL CONSUMERS, SAYS PM

Mozambican Prime Minister Carlos Agostinho do Rosario has told Parliament that the country cannot afford to offer general fuel subsidies to benefit all consumers, both those who can afford to pay higher prices and those who cannot.

Responding to a question in Assembly of the Republic about the effect of the fuel price increases announced by the government recently, he said that raising the price of fuel “is the path the government has found to ensure that the domestic market prices gradually cover the real costs of importing and distributing fuel”.

He pointed out that the last alteration in fuel prices was in 2011 and because the government had kept the prices unchanged since then the State had to compensate the fuel companies for the difference between the price of sale to the public and the real import and distribution costs, a situation made much worse by the sharp devaluation of the metical currency over the last two years.

Compensating the fuel companies really meant that the government was subsidizing all consumers. This was no longer viable, and Rosario insisted that fuel subsidies must be gradually removed “to reduce the pressure on the State budget”, and release resources which could be used in the education and health services, or to improve water supply.

Source: NAM NEWS NETWORK