Good afternoon. Why is it so hard to find petrol and diesel in Mozambique this week? Why are so many petrol stations running out of fuel? Not because there is no fuel in the country. Of fuel there is plenty: so much so that, when a fuel tanker tried to unload its cargo at the port of Nacala yesterday, it was difficult to find a storage tank with spare room. The problem is that fuel distributors are unwilling to distribute the fuel to retailers. Fuel prices in Mozambique are regulated, and the price is adjusted periodically based on the last two months’ wholesale prices. That means that the sharp increase in oil prices resulting from the war in the Middle East has not yet been factored into fuel prices.
The full Daily Briefing continues below for Pro subscribers. Subscribers to the Zitamar News tier can read the top half, including the full leader article, here.
Up to now, the government has persuaded distributors to keep buying fuel, and the Bank of Mozambique quietly made some extra US dollar financing available to commercial banks two weeks ago, to help finance fuel imports. But distributors are increasingly reluctant to keep buying, when the retail price is not high enough to repay them. Petrol is currently being
imported by Vitol, the contracted fuel importer, for about $1600 a tonne, when the price at the pump is more like $730 a tonne. So, less and less fuel is moving from storage tanks to pumps. Meanwhile, fuel prices have risen in neighbouring countries, which has encouraged foreigners to cross the border to fill up their cars and lorries into Mozambique. According to the government, petrol stations have been selling fuel at record speeds, sometimes a week’s worth in 24 hours. The country has been living in a bubble, insulated from the price rise that has been hitting consumers and businesses in the rest of the world.
