Mozambique needs more money to import fuel

May 16, 2006 02:00 AM

The Mozambican government is negotiating with the International Monetary Fund (IMF) and the World Bank for an additional $ 50 mm in its foreign reserves to strengthen its capacity to import refined fuels.
Finance Minister Manuel Chang said that the government target of 8 % growth for this year may have to be reviewed downwards because of the sharp increase in the price of oil.
"There is no doubt that the situation of fuel prices affects the national economy", he said.

Chang added that "Mozambique is a country that does not influence the price of fuel in the international market. We have to accept the established prices, and there is no doubt that this affects us".
"In our meetings with our partner international institutions, namely the IMF and the World Bank, we have been raising this issue, and there seems to be some action in this regard, because the IMF has just told us that it agrees to review some of the indicators, including the sums it allocates to us, taking into account the increased price of oil", the Minister said.

On what the government is doing to deal with the possibility of continuing hikes in world oil prices, Chang said "we must monitor the real situation and then we will see".
"At the level of the state apparatus, we will have to adjust to our reality, because our budget has been approved and the quantities of fuel to be used have been defined. But in terms of the country as a whole we will need more imports and, as I said, after negotiations with international institutions it was decided to adjust some of the indicators, which will lead to an increase of the country's reserves by about $ 50 mm", he added.

The Mozambican government reviews fuel prices every month and changes them whenever the price of importing fuel, when expressed in the local currency, meticais, rises or falls by more than 3 %, or whenever there is a change in fuel tax.
The last price rise, of up to 5 %, took place on 5 May. Petrol now costs 25,000 meticais (about $ 1) a litre, while diesel is somewhat cheaper at 22,560 meticais a litre.

Source: Agencia de Informacao de Mocambique
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