The Impact of Fuel Policies on Price Control in Mozambique from 2015 to 2019

Abstract

This article analyzes the impact of the price control policy on fuels in Mozambique, in view of the successive increases in the price of crude in the international market from 2015 to 2019. The stabilization of the general price level is one of the biggest concerns of all States in the World and Mozambique is not an exception, as the opposite presupposes an increase in the cost of living and a consequent loss of purchasing power. The results of this research shows that in the referred period, the fuel price control policy adopted by the Government of Mozambique had a positive impact in this sector, since the inflation rate is decreasing, although in the same period, the price of crude in the international market has grown at an average of 80% per year, corresponding to 62$ and an increase of 31$ from 2015 to 2019. From 2017 to 2018 there was disinflation in the price of fuel in Mozambique with the exception of Liquefied Petroleum Gases. However, there was a high inflation from 2016 to 2017, mainly influenced by lighting oil and diesel, which registered 36% and 33% respectively. Therefore, for any of the results obtained in both 2016, 2018 and 2019, we see that they are consistent with the purposes of price stabilization. Therefore, the impact of the adopted policies is positive. While price control in Mozambique is effective, it is necessary to carry out further research on these matters, to assess the impact of this policy on national oil companies