Paul Bérenger réclame une baisse des prix
La PNQ du leader de l’opposition adressée au ministre de l’Industrie et du Commerce, Cader Sayed-Hossen, le mardi 19 novembre, était axée sur le « levy » d’une roupie qui sera imposée sur chaque litre de carburant vendu à la pompe.
Il a invité le ministre, dans un premier temps, à donner les raisons pour lesquelles il n’y a pas eu de baisse dans les prix de l’essence et du diesel depuis le mois de mars. Ensuite il a réclamé le montant payé pour la prime au fournisseur, le fret et l’assurance depuis le 1er mars 2013, à ce jour. Et finalement il a voulu savoir le montant payé à ce jour pour le hedging et inviter le ministre à dire si le gouvernement compte abandonner ce projet.
Dans sa réponse le ministre a déclaré que le « levy » n’entraînera aucune hausse du prix des carburants et celui du ticket de bus. Il a indiqué que depuis le mois de mars Rs 586 millions ont été versées au Price Stabilization Account à partir d’un surplus réalisé sur la vente des carburants et que la State Trading Corporation (STC) a déjà récupéré Rs 4,94 millards sur l’exercice de « hedging » effectué en 2008.
Paul Bérenger a dénoncé le fait que ce sont les gros opérateurs qui bénéficieront de ce levy alors que les petits opérateurs qui sont en difficultés seront exclus de ce plan. Avec les chiffres effarants des Hedging Losses et les injections de fonds dans le Price Stabilization Account et les fonds non dépensés transférés au Consolidated Fund, le moment n’est-il pas venu pour faire bénéficier les consommateurs d’une baisse des prix sans compter qu’il y a une somme de Re 1.85 dans la structure des prix pour la RDA, a dit Paul Bérenger.
Lire la PNQ dans son intégralité
STC – DIESEL & MOGAS – PRICES
The Leader of the Opposition (Mr P. Bérenger) (by Private Notice) asked the
Minister of Industry, Commerce and Consumer Protection whether, in regard to diesel and
mogas, he will –
(a) for the benefit of the House, obtain from the State Trading Corporation,
information as to the –
(i) reasons why the price thereof has not been reviewed downwards, since
01 March 2013, indicating the total sum paid into the Price
Stabilisation Account, since then;
(ii) freight and insurance rates and premium paid to the supplier thereof, as
at 01 March 2013 and as at to date, respectively;
(iii) total hedging losses paid as at to date, and
(b) state if consideration will be given for the levy of one rupee per litre on the price
thereof to finance the Bus Replacement Mechanism, as announced in the Budget
Speech, to be reviewed.
Mr Sayed-Hossen: Mr Speaker, Sir, as regards part (a) (i) of the question, I wish to
inform the House that the Petroleum Pricing Committee (PPC) met on 01 March 2013 and
five more times since then, the last meeting being held on 31 October 2013. At its meeting of
01 March 2013, the PPC recommended an increase in the retail price of Gasoline and Diesel
after examining the figures submitted by the STC and applying the Regulations in force
governing those prices.
The price for Gasoline was increased from Rs49.30 to Rs52.25, that is, by 5.98% and
for Diesel from Rs41.20 to Rs43.95, that is, by 6.67%.
I must point out here, Mr Speaker, Sir, that these increases came about no less than 23
months after those prices were fixed on 30 March 2011. Over that period, the price of
petroleum on the world market had fluctuated enormously and had been generally on the rise
since the beginning of 2011. Also, the rate of exchange of the rupee against the dollar had
risen from Rs30.50 to Rs31.25.
The Price Stabilisation Account (PSA) put in place to mitigate fluctuations in retail
prices, which was positive by Rs198 m. in February 2012, had by end February 2013 been
depleted and was furthermore in deficit of Rs305 m. What this implies is that the Price Stabilisation Account of the STC had, over a period of one year, contained the retail price of
Gasoline and Diesel by injecting as much as Rs503 m. in the price structure. However, as at
end February 2013, the PSA could no longer be resorted to absorb the increased cost. This is
already provided for in the Regulations as the impact of the increased cost in the retail price
In subsequent meetings of the PPC, that is, since March 2013, the changes in cost of
petroleum products never reached the critical points at which further increases or decreases
could be envisaged.
I wish to enlighten the House on the mechanism of the PPC, Mr Speaker, Sir.
In the event of a decrease in world market prices and if the percentage decrease
between the calculated price and the current retail price is below 7%, there would be no
change in the retail price and the difference is credited to the Price Stabilisation Account. If
the decrease is between 7% and 10%, there would be an equivalent decrease in the retail price
and in case the decrease is more than 10%, the decrease would be restricted to 10% only.
In the event of an increase of world market prices and if the percentage increase
between the calculated price and the current retail price is below 5%, there is no change in the
retail price. Funds from the Price Stabilisation Account are then used to offset the loss
incurred by the STC. Again in the same way, if the increase is in the range of 5% to 15%, the
increase will be passed on to the consumer. In the event the increase is more than 15%, the
retail price change will be restricted to 15% only.
After examining the figures submitted by STC in respect of all consignments
imported since March 2013, the PPC found that there was no ground on the basis of existing
Regulations to effect any change in the prices fixed on 01 March 2013, either upwards or
This does not mean, however, that decrease in world prices impacting on the cost to
STC is not recognised or acknowledged. At its last meeting of 31 October 2013, the PPC
recorded a decrease in the price of Gasoline of the order of 4.5% and for diesel of the order of
3.24%. Since these percentages were below the critical 7% threshold to approve a decrease
in price, the PPC decided to maintain the prevailing prices and to allow all surpluses achieved
by STC to be credited to the Price Stabilisation Account. As I have said earlier, Mr Speaker,
Sir, this is to shelter the market from eventual cost increases as is always the case with the
fluctuations in oil prices worldwide.
As a result of keeping prices unchanged despite minor decreases in oil prices, the
Price Stabilisation Account has now covered the deficit in which it found itself in March
2013 and is now showing a positive balance of Rs281 m.
I, further, wish to inform the House that the Chairperson of the Petroleum Pricing
Committee has made pertinent observations regarding the functioning of the mechanism of
the PPC. These observations have been communicated to me.
The most pertinent observation is that the mechanism has largely achieved its
objective of stabilising retail prices of Gasoline and Gas Oil on the domestic market.
However, the limits set out initially to trigger price increases or decreases to reflect prevailing
world prices might need to be adjusted. When this is done, limits can also be set to the
surplus or deficit that the Price Stabilisation Account can hold.
In September 2013, about seven weeks ago, I requested the State Trading Corporation
to propose a review of the said mechanism in the light of experience acquired so far.
Mr Speaker, Sir, since March 2013, the total sum paid into the Price Stabilisation
Account is Rs586 m. Of this amount, Rs305 m. have served to cover the deficit as at end
February 2013, and the present surplus of the PSA is Rs281 m.
This situation was to be expected as we are going through a relatively stable oil
market situation since March 2013. As a matter of fact, Mr Speaker, Sir, Brent prices have
been fluctuating between USD 100 and USD 120 per barrel with an average of USD 109.
This is only slightly lower than the average price of USD 111 in 2012.
Over the last three years, Mr Speaker, Sir, periodic oscillations with amplitudes for
increases higher than decreases have characterised oil prices on the world market. On
average, prices have been on an increasing trend and it is, therefore, wrong to focus on a short
lapse of time only when there is a temporary drop in prices.
For further information of the House, in India, prices rose for seven times over the
period June to mid-September 2013, the last increase being Rs1.63 per litre. In September
alone, there were two increases amounting cumulatively to a total of Rs4.78, only to see, in
October last, a minor reduction of Rs1.15 per litre of Gasoline, but accompanied by an
increase of R0.50 per litre of Gas Oil.
In Madagascar, right in the midst of the elections, prices were increased over the last
weekend by an average of 0.035 euros, that is, roughly Rs1.44 per litre.
Mr Speaker, Sir, as regards part (a) (ii) of the question, I am informed as follows –
Freight paid to the shipping company is made up of three components –
(a) basic freight at the rate of USD17.18 per Mton of cargo;
(b) bunker cost, which varies according to the price paid by the shipping company
from trip to trip;
(c) port dues at loading port and discharge port.
The total freight paid for the last tanker, which arrived in October 2013, amounted to
USD1,792,992 for a cargo of 63,069 Mtons. This works out at R0.73, i.e 73 Mauritian cents
per litre, i.e. 1.66% of the retail price of Gas Oil and 1.4% of the retail price of Mogas.
As far as insurance rates are concerned, I wish to inform the House that, after a tender
exercise carried out in July 2010, the State Trading Corporation allocated the Marine
Insurance Cover Policy for petroleum products to Mauritian Eagle Insurance Company Ltd
for period 01 August 2010 to 31 July 2013, at the rate of 0.034%. This policy was extended
up to end September 2013.
In August 2013, following a new tender exercise, the Marine Insurance Cover Policy
was awarded to Mauritian Eagle Insurance Company Ltd at the reduced rate of 0.030% for
importation of petroleum products for period 01 October 2013 to 30 September 2016.
Premium now, Mr Speaker, Sir. Premium agreed between the STC and MRPL is of a
commercial sensitive nature, and cannot, as per provisions contained in the Supply
Agreement (which contains a Non-Disclosure Clause), be disclosed without prior approval of
the supplier. I wish to inform the House that, for the ongoing Supply Agreement, covering
the period 01 August 2013 to 31 July 2016, premium has been revised downwards.
Furthermore, in a spirit of transparency, I am most willing to make the hon. Leader of the
Opposition privy to the Supply Agreement and, therefore, invite him to consult the said
Agreement if he so wishes.
With regard to paragraph (a) (iii), Mr Speaker, Sir, the total hedging losses incurred
and paid to date amount to Rs4.94 billion, inclusive of interest, but this has been canvassed a
number of times in this House.
I wish to inform the House that the item Hedging Loss Recovery was amounting to
Rs1.25 per litre on Gasoline and R1.00 per litre on Diesel, and these were removed from the
price structure of these two products with the price change of 01 March 2013.
Regarding part (b) of the question, Mr Speaker, Sir, the difficult financial situation of
bus operators is known to one and all. The frequency and quantum of increases in the bus
fares do not enable these operators to be financially viable for the timely replacement of their
buses even for the purchase of conventional buses, which are at present being operated for
public passenger transport.
In order to ensure a notable improvement in the quality of bus services, there is an
urgent need to come forward with a mechanism which will enable bus operators to replace
their buses, as and when required, by modern and eco-friendly buses, which will meet the
expectations of the travelling public, and change the transport landscape in consonance with
the development of the country. The proposal for part funding for the purchase of up to
2,000 buses over the next five years by semi-low floor buses, complying with at least Euro III
emission standards, can only be achieved through the mechanism announced by the Vice-
Prime Minister, Minister of Finance and Economic Development in his Budget Speech.
Supporting bus operators, Mr Speaker, Sir, to improve the quality of public transport
is a practice followed in many countries, and direct Government intervention to that effect is
normally resorted to. As yet, about 175 buses used for public transport (i.e. about 10% of the
fleet) are over 16 years old, and need immediate replacement.
The modernisation of our buses has been on the agenda for years, but as yet only four
semi-low floor buses are in operation. With this trend, it will take years, if not decades, to
realise a full modernisation of our bus fleet, if Government does not partner with bus
operators to meet the marginal cost of semi-low floor buses, as compared to conventional
This partnering, Mr Speaker, Sir, should be viewed as a support to benefit
commuters, in terms of convenience, comfort, efficiency, reliability and safety, and not
simply as a subsidy to bus operators. It is also noteworthy that our elderly, disabled persons
and children encounter considerable difficulty to have access to public transport facilities,
owing to the high steps and the high floor level of the buses now in operation. The replacement of these buses by semi-low floor will bring a major boost to the mobility and
quality of life of these persons.
The House may wish to note that the Government of Singapore has recently acquired
600 semi-low floor buses, and has made these buses available to bus operators on a long term
soft loan scheme. This measure was taken in Singapore, in view of the dire financial
situation of the bus operators.
I wish to further inform the House that, in terms of accounting, Mr Speaker, Sir, when
we include that one line, that R1 levy, this will automatically deduct R1 from another line on
the price structure, which is adjustment. So, the overall impact will be zero. The overall
impact of the introduction of that R1 levy will be zero because this will adversely affect the
line adjustment, and I can assure the House that, following this, there will be no increase in
the selling price, in the retail price of gasoline or diesel. I repeat, there will be no increase in
the price of gasoline and diesel, as a result of this measure. Now, if the price of oil increases
on the world market, this is another story.
The amounts collected under the Bus Companies Recovery Account (BCRA) are by
far inadequate to fund the bus replacement programme. This Government, Mr Speaker, Sir,
is conscious of its commitment to improve the quality of life, including the quality of public
transport, and Government imperatively had to come up with a mechanism to ensure this
improvement. The measure announced for the levy of one rupee per litre on the price of
Gasoline and Diesel will serve that purpose, and is an integral part of Government policy.
Thank you, Mr Speaker, Sir.
Mr Bérenger: Mr Speaker, Sir, the hon. Minister has acknowledged that prices have
been going down since 01 March. He referred to poor Madagascar, as an example, where
prices have gone down, but he did not refer, for example, numerous countries across the
world where, since 01 March, decreases have taken place. Is he aware that such has been the
case last week in Kenya, for example?
Mr Sayed-Hossen: Mr Speaker, Sir, I do not deny the fact that in many countries
there are fluctuations in the retail prices of petroleum products. I have said in my
intervention that, with the introduction of the PPC mechanism, this has allowed to keep
stability on a long term basis in retail prices. For example, I mentioned the case between
2011 and 2013. For nearly two years, 23 months, prices have been kept stable, in spite of the fact that prices were going up. So, this is a flattening structure, Mr Speaker, Sir. It does
happen that, at one moment in time…
… there is an increase in prices, in cost, and the Price Stabilisation Account will absorb the
increase, and maintain the price at a level which is affordable. But then comes a time when
the PSA can no longer support that, and then prices increase.
What used to happen before that, Mr Speaker, Sir, was with the automatic pricing
mechanism, the automatic pricing mechanism used to cause a great instability in prices, and
prices would change every month. There would be total unpredictability in budgeting, not
only for companies, but also for households and this would cause – I think everybody
remembers that – long queues at petroleum stations at every end of month when the automatic
pricing mechanism would be meeting and, of course, this has helped tremendously to contain
inflation and to help budgets of households.
Mr Bérenger: The bottom line, Mr Speaker, Sir – and I am sure the hon. Minister will
agree – is that since the 01 March across the world prices have been going down, not in
Mauritius, and the results, he has just given us the figure, a massive Rs580 m. has gone into
the Price Stabilisation Account since 01March 2013. Will the hon. Minister agree with me
that, at least, part of that Rs500 m. should have been passed on to consumers?
Mr Sayed-Hossen: Mr Speaker, Sir, the hon. Leader of the Opposition or the
Opposition in itself did not say anything when the deficit of the Price Stabilisation Account
stood at Rs305 m. in February 2013. There was then no talk of increase in prices. The Rs586
m. which have been collected now represents a surplus of Rs281 m. which is less than what
has been collected and I have also said in my main reply that I have requested STC to come
up with a proposal to review the mechanism of the PPC. I will wait for the recommendations
of the STC and Government will decide on a way forward. But, certainly, the Price
Stabilisation Account and the PPC system have been operating perfectly to stabilise prices,
and especially to contain inflation.
Mr Bérenger: I listened to the hon. Minister carefully. Am I right in saying that what
he has informed us is that freight rates and insurance are now negotiated by the STC?
Mr Sayed-Hossen: I don’t think I said that. No, I did not say that. Let me re-read
very briefly my answer to that. I said freight paid to the shipping company contains three
components; basic freight at the rate of 17.18 US dollars, then bunker cost which varies. It
depends on what the shipping company pays.
Mr Bérenger: As far as changes in premium are concerned, the hon. Minister
referred to confidentiality clauses once again, and then offered me, supposedly, to turn into a
‘bhai looké’, and I don’t know what happens then to the confidentiality – when I look at you I
thought I saw the MBC behind you, when, in fact, somebody from your …
Am I right in saying that, at least, as far as the premium paid to the supplier is concerned, this
is negotiated by the STC and as a result of it being negotiated by the STC, has gone down, as
the hon. Minister has said?
Mr Sayed-Hossen: I did not treat the hon. Leader of Opposition as ‘bhai looké’, but, I
mean, that’s his own words, Mr Speaker, Sir. I did not call the hon. Leader of Opposition
‘bhai looké’. He called himself ‘bhai looké’.
Mr Speaker, Sir, the hon. Leader of the Opposition, I am sure, understands that the
supply agreement concerns the STC, on one hand, and MRPL. We do not represent MRPL.
If in the supply agreement there is a confidentiality clause, we have to respect that. But, my
invitation to the hon. Leader of the Opposition stays good.
Now, concerning the premium, the premium negotiated with MRPL actually was
negotiated by the State Trading Corporation after obtaining independent expert advice from
petroleum consultants and neither the freight nor the insurance rates have been negotiated.
The freight rate is established by a contract. The insurance rate is obtained through tender.
We are in a long-term contract for tender and the premium rates have been negotiated by the
STC with MRPL and have been reduced.
Mr Bérenger: My question is: has the premium paid to the supplier always been
negotiated by the STC or negotiated by others before and, as a result of STC negotiating, it
has gone down? This is my question.
Mr Sayed-Hossen: To my knowledge, Mr Speaker, Sir, the premium rates have
always been negotiated by the STC.
Mr Bérenger: The hon. Minister has given us the figure for total sum paid for
hedging losses, Mr Speaker, Sir; Rs4.9 billion that have come out of consumers’ pockets.
Does the hon. Minister have the total sum paid into the MID Fund, being given that we have
been informed in the course of the presentation of the Budget that this Fund is going to be
wrapped up? How much in total has been paid through this levy for the MID Fund?
Mr Sayed-Hossen: I have the figures here, Mr Speaker, Sir. In 2011, Rs124 m. were
paid to the MID Fund; in 2012: Rs126 m.; and it is estimated that for 2013, the total sum
would be Rs132 m.
Mr Bérenger: Since the hon. Minister has the figures with him, can he tell us how
much has been spent out of that contribution by the consumers through that levy, how much
has been spent, and how much transferred to the Consolidated Fund?
Mr Sayed-Hossen: The MID levy is levied by the STC and goes to the Consolidated
Fund, Mr Speaker, Sir. From there on, I would not be in a position to answer the hon. Leader
of the Opposition.
Mr Bérenger: The consumers would like to know. Well, Mr Speaker, Sir, if I can
move on to this levy of R1 to pay subsidies for the private bus companies to purchase buses.
I could understand if one told me that there will be no increase in the bus tariffs, because the
hon. Minister said there would be no increase in the price of diesel and mogas. But, I did not
hear him say that there will be no further increase in the bus tariffs, because the last one, as
we know, goes back, not long ago, to August, 12% increase in the tariffs – and I am sure –
will the hon. Minister agree with me that this must have been included to what the private
companies need to renew their buses? Can the hon. Minister tell me why, although an
increase in tariffs of 12% was granted in August, a few weeks later we have this time to
impose on consumers a levy of R1 per litre for the same purpose, amongst other things,
renewal of bus fleet?
Mr Sayed-Hossen: Following information which I obtained from the hon. Vice-
Prime Minister, Minister of Public Infrastructure, National Development Unit, Land
Transport and Shipping, I can assure the House that there will be no increase in bus tariffs as
a result of this.
Mr Bérenger: I am not saying as a result. I am saying in the absolute because the
tariff includes renewal of bus fleet. Can I know from the hon. Minister how much will be
collected per year through that levy? The figure of Rs240 m. per year has been calculated all
over the place these last days. Is an estimate available, whether that figure of Rs240 m. per
year is correct?
Mr Sayed-Hossen: The amount collected with this levy will be slightly more
important than the Rs240 m. It will probably be around Rs350 m., Mr Speaker, Sir.
Mr Bérenger: Is the hon. Minister aware that this R1 levy, the increase in the levy
and so on, is going to be paid by the small operators, and the big operators are going to be
helped supposedly à travers this Fund? Is he aware that all those measures, including that
levy which is going to be translated through the price of diesel and Mogas which the small
bus operators – the bus individuel – pay, that, in fact, they are in even more difficulties than in
the past? I am talking of the small bus operators and the bus individuel. So, what will be
done to help them survive and renew their fleet?
Mr Sayed-Hossen: Mr understanding, Mr Speaker, Sir, is that the Bus Fleet Renewal
Scheme does not concern exclusively companies, but also addresses small operators and
probably even more so. But then, I would say that this question would better be answered by
my colleague, the hon. Vice-Prime Minister, Minister of Public Infrastructure, National
Development Unit, Land Transport and Shipping.
Of course, I mean I don’t manage transport!
Mr Speaker: Last question to the hon. Leader of the Opposition!
Mr Bérenger: My last question would be not to the hon. Minister; he has just
referred me to his colleague, the hon. Vice-Prime Minister, Minister of Public Infrastructure, National Development Unit, Land Transport and Shipping. My question is: being given the
situation and the startling figures that we have just been provided for in terms of hedging
losses, in terms of how much money will be collected through this special levy and so on,
will Government consider seriously now bringing down the price of diesel and mogas as has
happened across the world and cancelling this levy of R1 per litre which, I must point out,
comes on top of the Rs1.85 per litre already collected and paid to the RDA?
Mr Sayed-Hossen: Mr Speaker, Sir, in 2005, the Automatic Pricing Mechanism was
still in force. It was supposed to meet every quarter. It was supposed to meet at the end of
June or early July. It was evident that if the Automatic Pricing Mechanism were to meet and
make the prices public, prices of diesel and gasoline would have gone up by 15%. That was
on the eve of the elections which were due on 03 July 2005. The then Government decided to
postpone the sitting of the…
… Automatic Pricing Mechanism Committee…
… for three months later because…
Mr Speaker: I say silence!
I want some silence!
Mr Sayed-Hossen: … they feared that prices would go up, that they would lose votes
and lose the elections. But they did lose votes! And they did lose the elections, Mr Speaker,
We do not interfere …
Mr Speaker: Silence! Allow the hon. Minister to answer!
Sayed-Hossen: We do not interfere with the Petroleum Pricing Committee.
If the mechanism of the Petroleum Pricing Committee comes to the conclusion that…
Mr Speaker: I say silence, now!
Mr Sayed-Hossen: … prices have to be reduced, then prices have to be reduced.
There is no interference from my Ministry or from the STC into that. It is an independent
committee which operates independently.
Thank you, Mr Speaker, Sir.
Mr Speaker: Time is over!