The International Monetary Fund (IMF) has suggested that Mozambique should perform a reform of its fuel import and subsidies system, Macauhub reports.

IMF in a report, noted that the bill for fuel paid by the country had reduced due to the fall in oil prices in the global markets, adding that the current system was expensive, ineffective and misapplied.

The report stated that the government of the country in May 2015, had to convert about $100 million of outstanding arrears to fuel distributors to securities, in order to pay part of the amassed subsidies in 2014. The subsidies amassed due to the ineffectiveness in the import system.

According to the monetary agency, since April 2014 the rate of importing fuel to Mozambique, was higher, than that of most countries in the region due to the import system’s ineffectiveness. IMF said the granting of permission to oil product distributors and major natural resource companies to import fuel and raise financing directly, according to market needs are part of procedures that could assist in improving the system.

Anita Fatunji