Mozambique considers fuel subsidy

Mozambique: Suppliers Propose Models for Fuel Subsidy
AllAfrica.com - Washington,USA
The two main fuel distribution companies in Mozambique, BP and the publicly-owned PETROMOC, are presenting proposals on exactly how private transport operators can benefit from the subsidy on diesel announced by the government in the wake of the riots that paralysed Maputo on 5 February. The riots were provoked by an increase of up to 50 per cent in the fares charged by the privately-owned minibuses (known colloquially as "chapas") that provide much of Maputo's passenger transport. The government and the federation of Road Transport Associations (FEMATRO) agreed to restore the old fares, but in return there would be a fuel subsidy for the chapas. A price rise of 23 January increased the price of diesel by 14 per cent, to 35.35 meticais (about 1.47 US dollars) per litre. The subsidy will bring it down to the pre-23 January price of 31 meticais a litre. But the practical mechanisms of how to operate this subsidy, so that only licensed chapas benefit from it remain unclear ... FEMATRO chairperson Rogerio Manuel told reporters "we invited the fuel distributors to present sustainable solutions to implement fuel supplies under the subsidy announced by the government" ... One problem is that chapa owners by and large do not know how to handle money. Manuel admitted 90 per cent of them do not have organized accounts. But with the lack of accounts, earlier claims by Manuel that chapas are running at a loss cannot be verified. The absence of accounts also raises interesting questions as to how much tax, if any, these transport operators are paying ...