Two fuel companies halt supplies

Two fuel distribution companies have stopped supplying the Mozambican retail market with fuel, in an attempt to put pressure on the government to raise fuel prices, according to a report in Friday’s issue of the independent newssheet “Carta de Moçambique”.

One of these companies, Puma, cut the supply of diesel on 17 June, and of petrol on 27 June. The other, Vivo Energy (Engem) has also stopped supplying many of its filling stations, but the paper did not say when this began.

In private, the two companies say they cannot continue selling fuel at a loss, and have told the government this. The companies still in the retail market are TotalEnergies of France, the Portuguese fuel company Galp, Mozambique’s own fuel company, Petromoc, plus a few smaller companies. All are said to be losing money.

They are waiting for the government to announce new prices which, under one of its own diplomas, it should have done 15 days ago. The companies want a return to positive profit margins, and an end to the government’s constantly rising debt to the distributors, currently estimated at 125 million US dollars.

That debt rises with every drop of fuel sold. Their companies put their losses at 10.45 meticais (16.3 US cents) for every litre of petrol sold, 4.63 meticais per litre of diesel, and an extraordinary 18 meticais per kilo of cooking gas.

To import fuel the companies need guarantees from the banks. But at this rate, the government’s debt to the companies could exceed the guarantees demanded by the banks, and when that happens, the banks may end their overdraft facilities.

(AIM)