As was the case last year, the Petroleum Pricing Committee maintained fuel prices at its May meeting, ahead of the presentation of the National Budget. However, the Minister of Finance announced, in his budget speech in 2023, a reduction in the price of gasoline at the pump.
The last meeting of the Petroleum Pricing Committee (PPC), on May 24, 2024, concluded with the maintenance of the prices of a liter of gasoline and that of diesel at the pump. Consumers pay Rs 66.20 per liter for the first named while diesel costs Rs 63.95 per liter.
Bhimraj Sunnassee, president of the Petrol Retailers Association, stressed that he did not expect the May 24 meeting of the PPC to result in a reduction in fuel prices. “We didn’t really expect anything. It should nevertheless be noted that any increase affects retailers' cash flow. But the trend did not suggest a possible increase in prices. »
Budget 2023-24
Last year, i.e. at the meeting held on May 11, 2023, the PPC had also decided on the status quo at Rs 74.10 and Rs 54.55 per liter respectively for the retail prices of petrol and diesel. However, a few weeks later, on June 2, 2023, Renganaden Padayachy announced this in his Grand Oral: “We are reducing the price of gasoline from Rs 74.10 to Rs 69 per liter with immediate effect from midnight . » In the process, the PPC came together to implement this budgetary measure. At the time, the Price Stabilization Account showed a deficit of Rs 4.2 billion.
Are we heading towards the same scenario this year? Megh Pillay, former director of the State Trading Corporation (STC), says he will not be surprised if the Finance Minister announces a reduction in the price of gasoline in the next Budget. For good reason, he explains, all the data remained almost the same as last year.
“The price of a barrel of oil, which was around $90 in September, subsequently decreased. It's currently around $82. Even the most pessimistic forecasts do not project large increases. The average price of a barrel of oil should be around 83-84 dollars despite the conflict in Ukraine or other tensions,” indicates Megh Pillay.
The market, he continues, remains stable and unaffected by the geopolitical situation. He explains that in Mauritius, the price of fuel no longer depends on world prices. “The problem remains high taxation. Everything is in the hands of the Minister of Finance who can decide to reduce the burden of taxation on petroleum products, which will lead to a drop in prices at the pump. »
Other scenarios cannot be ruled out, according to a political analyst. He believes, for his part, that taking into account the fact that fuel prices represent a card to play for the government in view of the next elections, any reduction will be a question of timing.
“The opposition presented the reduction in fuel prices as one of its flagship measures. Why would the CCP lower the price now? I don't think this will be a measure in the 2024-25 Budget. The government will lower the price on the eve of the elections,” he says.
PSA
However, the press release published by the State Trading Corporation following the last meeting of the PPC mentions that the Committee notably examined the deficit of Rs 4.3 billion (May 24, 2024) in the Price Stabilization Account (PSA) of Gas Oil. Asked whether this could compromise the Finance Minister's plans, Megh Pillay replied: “On various occasions I have highlighted the fact that the PSA no longer works. The price at the pump is no longer determined by the pricing mechanism, but by the Minister of Finance. »
That said, Bhimraj Sunnassee, who would not be against the idea of a price reduction, does not have too many illusions. He recalls that a possible reduction announced in the 2024-25 Budget speech will be beneficial “for gas station managers and consumers”.
However, he concedes, the PPC has already made its calculation preceding the May 24 meeting, and decided that an increase in the price of gasoline was not necessary. “We cannot predict what the Minister of Finance will decide. The date of the next elections will be decisive. We should not expect a drop in prices if the elections are not imminent,” concludes the president of the Petrol Retailers Association.
