Maputo — The Mozambican government has abolished the monopoly on importing petroleum exports enjoyed by the company Imopetro.

Imopetro is owned by the various fuel distributing companies licensed to operate in Mozambique, and up to now only Imopetro has been allowed to import petroleum products in bulk.

But at the Cabinet meeting on Tuesday, the government altered the import mechanism so as give itself the power, in moments of crisis and in defence of the country's economic interests, to designate a different body to import fuel.

Speaking to reporters after the Cabinet meeting, the government's spokesperson, Deputy Education Minister Luis Covane, said the decision was taken bearing in mind the experiences of the past four years, when there had been unprecedented instability in fuel prices on the world market. In mid-2008, he recalled, a barrel of oil cost five times the price of 2004.

"We have been importing refined products, which are more expensive, and our import bill soared", he said.

Covane said that in 2004, the country paid about 400 million US dollars for its fuel bill, but in 2008 the same amount of fuel cost 750 million dollars.

The current revision of the import mechanism ends the country's dependence on Imopetro. Now the Minister of Energy, after consultation with the Minister of Finance, can appoint another duly licensed distributor to import the fuel. The government has yet to specify under exactly what circumstances this will happen.

Covane said that the importer designated by the government "will be exempt from the requirement to hold an international public tender. Instead, it may negotiate directly with the suppliers, under conditions that are beneficial for the country".

The government has also decided to increase the production and processing of natural gas from the Pande and Temane gasfields in the southern province of Inhambane from the current 120 million to 183 million gigajoules a year. The government has also approved a development plan for the gas pipeline from Temane to Secunda in South Africa, which will permit an increase in its transport capacity.

Expanding the production capacity at Temane will guarantee additional quantities of natural gas for the domestic market. Currently the bulk of the treated gas is exported to South Africa, leaving very little for Mozambique's own needs.

With the expansion, new projects become viable, such as a gas-fired power station at Moamba, in Maputo province, which will consume 27 million gigajoules of gas a year.