Government considering buying Russian fuel

Mozambique’s Minister of Mineral Resources and Energy, Carlos Zacarias, has said that Mozambique might buy fuel from Russia, if this turns out to be a viable option.

A proposal to this effect was made earlier this week by Russian ambassador. Alexander Surikov – but he stipulated that any purchase would have to be in the Russian currency, roubles.

Speaking to reporters on Thursday, during a meeting of his Ministry’s Coordinating Council, under ay at Chidinguele, in the southern province of Gaza, Zacarias said “I am sure that we shall study the viability of this offer”.

It came, he added, “at a peculiar moment” characterized by great volatility in international oil prices, caused in part by the Russian invasion of Ukraine.

The idea of obtaining fuel from Russia came originally from a group of Mozambican business people, from the Confederation of Mozambican Business Associations (CTA), who met with Surikov.

After that meeting the CTA Executive Director, Eduardo Sengo, said that businesses looked favorably on directly importing fuel from Russia – but this would only be viable if approved by the government and by the Bank of Mozambique.

But the Bank of Mozambique does not hold large quantities of roubles. To pay for the fuel in roubles would mean selling other currencies to the Russian central bank in order to obtain roubles.

The Bank of Mozambique would have to consider whether it is really worth surrendering some of its reserves in dollars or euros in order to acquire roubles – particularly as there might be a political piece to pay, given that Russia is under sanctions from most western powers, because of its onslaught against Ukraine.

Nonetheless, Sengo claimed that Russian fuel would be cheaper than fuel from other sources, and this could help alleviate the Mozambican cost of living.

Source: https://clubofmozambique.com/news/mozambique-government-considering-buying-russian-fuel-aim-222277/