Another Hit to Consumers Purse

Editorial

Yet another hit to consumers purse with the announcement of the fourth increase of petrol and diesel prices within the last five months: today Mauritians are having to fork out Rs74.10 for petrol and Rs 54.55, representing an increase of 10% over the last price increase effective as from April 19, or 40% higher than the prices that prevailed last February. The cascading adverse effects of these never-ending price increases of essential goods and other commodities coupled with those of petrol and diesel on the purchasing power of all Mauritians generally, in particular the already squeezed low-income groups and middle class cannot go unattended by the government and it is expected to do an immediate job – address the population’s concern with the rising cost of living.

What is regrettable is that the country is today paying the price for past rash decisions which have resulted in the depletion of the STC’s Price Stabilisation Account. First, the unjustified breach of the Betamax contract by the SAJ-led government resulting in the decision of the Singapore International Arbitration Centre in favour of Betamax instructing the payment of damages amounting to between $115-125 million with interest, decision confirmed by the Privy Council. Another of the same nature was the non-renewal of the contract negotiated by the LP-PMSD government with Mangalore Refinery and Petrochemicals Limited, India, for the supply of our oil products at fixed prices. It will be recalled that the exclusivity contract entered upon since 2006 contained guarantees of supply independently of any disruptions on the world market. The resulting security and quality of petroleum products supplied by Mangalore Refinery and Petrochemicals Limited were such that the contract was renewed on a three-year basis in July 2007, 2010 and 2013.

Following two years of pandemic-induced hardships, now compounded by the impacts of the Ukraine conflict on the global economy, the government should come out and tell the population what it plans to do for tackling mounting fuel, food and other prices rather than wait for the forthcoming budget to indulge in some false political bravado, as it is widely suspected, with announcements of symbolic measures to alleviate the hardships of Mauritian households. Telling the people that most of what’s happening is beyond the government’s control is not going to be convincing since it is public knowledge that almost 50% on the price of petrol and diesel go towards excise duty and other taxes as well as to the Covid and other solidarity funds.

Handing out something tangible is imperative today: a cost-of-living package, including a one-off cash payment for low- and middle-income earners, as has been suggested by numerous economists, or waiver over a period of time to be determined on utilities bills and extended public transport subsidies and fuel excise and other tax cuts. The sooner the better.

Mauritius Times ePaper Friday 20 May 2022