The rumour has been confirmed. The motorists who blocked the streets were finally right. The STC issued a statement late in the evening on Tuesday 19 April. The Petroleum Pricing Committee met to set a 10 % increase in fuel prices under Regulation 5 (3) (b).
This is another increase in less than two months. The new fuel prices are effective from midnight of Wednesday, April 20. Petrol(Mogas) has gone up from Rs 61.30 to Rs 67.40, showing an increase of Rs 6.10. Diesel (Gas Oil) is from Rs 45.19 to Rs 49.60, an increase of Rs 4.41. This is a hard blow for all Mauritians after a 33.3% increase in the price of household gas, which was unexpectedly announced at midnight on Tuesday 19 April. The price of a 12 kg cylinder is Rs 240, a 6 kg cylinder is Rs 120 and a 5 kg cylinder is Rs 100.
This international pressure has called on the government to review its subsidy strategy. It is reported that the STC has a hole of about Rs 2.9 billion. If the government continues to charge the price, it has to inject about Rs 2 billion into the subsidy fund per year instead of about Rs 1 billion. This way the government passes it on directly to the consumers and not just on fossil fuels.
As a reminder, the increases in fuel prices have been going on since June 30. The government has been paying Rs 2 per litre of petrol and diesel into a fund for the purchase of vaccines. A further increase of 10% on 28 December. And on February 26, the PPC announced a further hike by 10% bringing the price of petrol to Rs 61.30 and diesel to Rs 45.10.
The STC said in its statement that despite this new hike, the agency continues to lose Rs 5.68 on a litre of petrol and Rs 15.05 on a litre of diesel. Thus, with petrol at USD 1,065.54 per ton, the normal price of petrol should be Rs 73.93 or Rs 12.63 or a mark-up of 20.60% and diesel at USD 138.12 per barrel at 66.90, or by 21.80 or a mark-up of 48.34%.
Below is the STC press release for a better understanding of the calculation and the graph:
