11 December 2018

Mozambique: Corruption Boosts Price of Liquid Fuels

Maputo — Mozambicans are paying more than they should for liquid fuels, because of corruption, particularly in the form of over-invoicing, according to a study by the anti-corruption NGO, the Centre for Public Integrity (CIP), which was released in Maputo on Monday.

The report estimates that between 2013 and 2015, an additional 80 million US dollars was spent on importing fuel, because of over-invoicing.

The re-export of fuel is also plagued with corruption. When imported fuels are intended to be sold outside Mozambique, in neighbouring countries, they enjoy tax exemptions. Some of the fuel importing companies take advantage of this by declaring as re-exports fuel which is sold in Mozambique.

CIP could not estimate how much tax the Mozambican state has lost through these fraudulent schemes, but it was certain that at least 20 per cent of the fuel declared as being in transit is in fact sold within Mozambique.

CIP accused the publicly owned fuel company, Petromoc, of massive over-invoicing, in the period when it was the only company that could import domestic gas. The Petromoc over-invoicing, it claimed, reached 400 dollars a tonne.

CIP also estimates that 50 per cent of the money paid by fuel consumers covers the costs of Petromoc and of the other fuel importing companies.

In electricity, there is also over-invoicing. CIP confirmed the accusation made some months ago by the then chairperson of the public electricity company, EDM, Mateus Magala, that EDM staff claimed to buy electricity meters for 100 dollars, when the real price was 20 dollars.

Analysing the EDM accounts for 2014 and 2015, CIP estimated that ten million dollars a year were spent on over-invoicing for electricity meters.

CIP also criticised the fact that Hidroelectrica de Cahora Bassa (HCB) sells most of the energy it produces cheaply to South Africa, while EDM has become reliant on independent producers who charge much more for their electricity.

The purchase of electricity from the independent producers, rather than from HCB, cost EDM 21 billion meticais (about 341 million dollars at current exchange rates), between 2014 and 2017.

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