Maputo — The Mozambican government has announced a price cut of around five per cent for petrol and diesel, taking effect on Thursday.

The price of a litre of petrol falls from 67.49 to 64.22 meticais (from 99 to 94 US cents, at current exchange rates), a reduction of 4.8 per cent. A litre of diesel now costs 60.16 rather than 63.58 meticais, a price fall of 5.4 per cent.

Other fuel prices remain unchanged: thus kerosene is still 48.44 meticais a kilo while domestic cooking gas still costs 68.23 meticais per kilo.

Speaking at a press conference held on Wednesday to announce the new prices, the National Director of Hydrocarbons and Fuels, Moises Paulino, said the price cuts are justified by the fall in international demand for refined fuels, largely caused by the coronavirus pandemic.

There had been a collapse in world oil prices, said Paulino. Thus the average price of a barrel of crude oil fell from 63 to 55 US dollars between January and February.

The price has continued to fall since then, but the new Mozambican prices are calculated on the basis of the costs of the fuel unloaded at the Mozambican ports between late January and early March.

The fall in world fuel prices, he added, is to some extent counterbalanced by the decline in the value of the Mozambican currency, the metical. The metical has been slowly depreciating against the US dollar for most of this year. The reference exchange rate quoted by the Bank of Mozambique on Thursday morning is 68.25 meticais to the dollar.

The general director of the fuel import agency Imopetro, Joao Macandza, told the reporters that the fuel tanks in the ports still contain products that were purchased at January and February prices.

Orders made in April and May at a much lower price (around 31 dollars a barrel) cannot be unloaded at the ports, because there is no space for them in the tanks in Maputo, Matola, Beira, Nacala and Pemba.

The total Mozambican fuel storage capacity in the ports is about 1.15 million cubic metres.