Intelligent news from Mozambique

Mozambique minibus drivers want fares to rise like bread

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Mozambican bakers have begun raising bread prices in the capital, Maputo, after prices were liberalised last week – a move that minibus drivers now want to be mimicked in the urban transport sector.

A survey by Zitamar News of the main bakeries in central Maputo found that the price of a standard 200g loaf of bread went up on Thursday from 7.5 meticais to 10 meticais. The price of the same loaf at resellers also went up by a third, from 9 meticais to 12 meticais.

While the price of bread rose slightly in 2016, the price of public transport on minibuses has been frozen for nine years. The Federation of Mozambican Road Transporters, FEMATRO, is now calling on the government to allow it to raise fares in the capital from 7 meticais per journey to 19 meticais – a rise of more than 170%.

Members of the Mozambican Bakers Association, AMOPAO, are still harmonising their prices despite liberalisation at the government level. The new AMOPAO price list has scrapped the 250g loaf, and introduced a 140g loaf priced at 6 meticais in bakers, and 7.5 meticais at retailers.

Dinis Muthisse, a baker and member of AMOPAO, told Zitamar News on Thursday that the current price schedule could change at any time because the raw materials used to produce the product keep rising.

“One concrete example I can give is that a firewood truck that we used to buy for 12,000 MZN or 15,000 MZN, now costs 35-45,000 MZN,” Muthisse said – highlighting that bakers’ costs are driven by more than simply the price of flour.

The government last week justified the withdrawal of flour subsidies saying that the global price had fallen.

Minibus fuel subsidy a ‘mistake’

The Mozambican government continues to subsidise licensed urban public transport providers by reimbursing the difference in the price of diesel when it exceeds 31 MZN per litre in order to avoid an increase in fares.

In practice, however, only about half of the transporters on the roads are licensed and therefore eligible for the subsidy – and even then it “does not provide support for operating costs, so many carriers are under-capitalized,” Castigo Nhamane, president of FEMATRO, told Zitamar on Tuesday. “Operators are unable to buy new tires or do reasonable maintenance, much less to increase or renew their fleet,” he said.

Signing the current subsidy model was a “mistake” on the part of FEMATRO, Nhamane said, adding that the federation is now talking to the government to find another more sustainable measure.

In an interview with newspaper Noticias last November, the Minister of Transport and Communications, Carlos Mesquita, admitted that the rates currently charged for urban passenger transport “are not adjusted for transport operating costs.”

FEMATRO says that the ideal minimum urban fare, including all operating costs, would be 19 MZN versus the current 7 MZN.

According to Nhamane, FEMATRO is arguing that the fuel subsidy should be removed, or if the government continues with this model, “it will have to add another subsidy that supports operating costs” .

Last Monday, the Nampula provincial government decided to adjust the tariff of interdistrict transportation from 1 metical to 1.25 meticais per kilometer, according to a report by Mozambican state news agency AIM.

Fuel prices are regulated in Mozambique. The latest adjustment on 22 March raised the price of petrol from 50.02 MZN to 56.06 MZN per litre, and for diesel from 45.83 MZN to 51.89 MZN per litre.[/ihc-hide-content]

© 2017, Zitamar Ltd. Reproduction and dissemination prohibited without written permission.

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