Fuel prices hike : a ‘poisoned gift’, says Tengur

Motorists are facing higher fuel prices since Wednesday midnight. The Petroleum Pricing Committee (PPC) has approved increase in retail prices of fuel as follows: Mogas, from Rs 44.90 to Rs 47.30 per litre and diesel from Rs 35.35 to Rs 38.10 per litre.

The PPC justified the hike saying there has been an upward trend in the FOB prices on the world market which has resulted in further deficit in the balance of the Price Stabilisation Account to Rs 333 million. The price of fuel includes various levies and charges, namely Excise Duty, MID levy, contribution to the Road Development Authority and contribution to the subsidy on rice, flour and cooking gas.

During the past six years, it was during the period March 2013 to August 2014 that the price of fuel was at its highest, namely Rs 52.25 for mogas and Rs 43.95 for diesel.
Analyst Gavin Ng says the fuel price hike will erode the salary compensation of Rs 360 as fuel consumption is a necessity both for motorists and for motorcyclists.

“People need to continue to travel and will spend more on fuel. The nearly Rs 3 hike in diesel might provoke bus operators to demand a fare hike. The construction sector, which is likely to pick up next year, will be partly affected, as it consumes a lot of diesel, whether in transportation trucks or specialized machinery like excavators. Taxi drivers will also be affected and may pass over the higher operation costs to passengers.

In a communiqué, Suttyhudeo Tengur, president of the Association for the Protection of the Environment and Consumers, terms the fuel price hike as a “poisoned new year gift”. He asked whether this is the appropriate time to impose higher fuel prices which will increase government revenues. He said the world oil price is stabilizing and there is no justification for a price hike in Mauritius. Tengur concluded that this decision will further make the government unpopular.

Industry and Commerce Minister Ashit Gungah told the press on Thursday that the price rise was inevitable given the rising oil prices on the world market. He stated that the Price Stabilisation Account has a deficit of over 300 million. He emphasized that the hike has nothing to do with the Betamax issue.