By: Ecofin agency

Mozambique’s government seeks to expand the role of its state-owned oil company to help contain worsening fuel supply pressures across the country. Through the Ministry of Mineral Resources and Energy (MIREME), the government introduced emergency measures aimed at stabilizing fuel distribution nationwide.

According to information reported on May 21 by Club of Mozambique, the Ministry of Finance created a special facility that allowed additional fuel cargoes to be released through Petromoc, the country’s public fuel distributor, in order to improve domestic supply levels. Since the week before the announcement, Petromoc has been supplying fuel to any retailer regardless of existing exclusivity agreements.

According to the ministry, the company currently covers about 42% of Mozambique’s fuel distribution market, in line with its usual market share. At the same time, Mozambique’s Energy Regulatory Authority (ARENE) approved new measures designed to strengthen oversight and coordination of fuel distribution. Authorities have also urged the population to avoid panic buying and consume fuel responsibly in order to prevent additional pressure on supplies, according to Portuguese news agency Lusa.

A Crisis Driven by Foreign Currency Shortages

The government’s intervention reflects deeper structural problems affecting Mozambique’s economy. The country is currently facing a shortage of foreign currency reserves, particularly U.S. dollars, which are essential for financing fuel imports.

In March 2025, Petromoc Chairman Hélder Chambisse explained that fuel importers were struggling to secure the bank guarantees needed to finance purchases. According to him, delays in issuing guarantees and processing payments have complicated contracts with suppliers. As a result, fuel shipments sometimes arrive at ports but cannot be distributed because companies lack the liquidity required to complete transactions.

Since then, Mozambican authorities have introduced several measures aimed at easing pressure on fuel demand. As previously reported by Ecofin Agency, President Daniel Chapo announced plans to strengthen public transportation services in order to encourage citizens to reduce reliance on private vehicles and lower national fuel consumption. In the same effort, Economy Minister Basílio Muhate also raised the possibility of subsidies for transport operators during discussions in parliament.

Structural Weaknesses Continue to Pressure the Economy

The foreign currency shortage reflects broader structural fragilities within Mozambique’s economy. The country continues to run a current-account deficit and has struggled to rebuild foreign exchange reserves.

Although Mozambique’s fuel import bill has declined in recent years, authorities say the trend does not reflect an improvement in the country’s economic situation. According to figures released by the Bank of Mozambique at the end of March, the country spent about $1.142 billion on fuel imports in 2025, down from $1.2 billion in 2024 and $1.42 billion in 2023. The central bank acknowledged that the decline mainly reflects lower consumption caused by difficulties financing imports rather than a strengthening of the economy.

The institution also admitted that pressure on foreign exchange reserves has reduced the country’s ability to purchase certain products abroad.