It is one of the rare decisions that satisfies almost everyone? Who will be against the significant drop in oil prices and the status quo for gas and flour? The government might win back some of the popularity lost with the last budget decisions and recent price hikes. Consumers are more than happy to note that their purchasing power will not go down any further?

?The Prime minister made it clear in his end-of-year speech that the government would do everything possible to protect the most vulnerable people of the society?, the minister of Trade, Rajesh Jeetah, pointed out. With this in mind, the government has decided to make additional efforts not to pass the price increases of some products on the world market to local consumers.

This is the case for flour, for instance. Despite the rise in the world price of flour ? the State Trading Corporation (STC) paid 30 % more than the consumer price ? the price in Mauritius will remain the same. As for Rajesh Jeetah, the reason for this is clear: the STC has the means to absorb these price increases while proceeding with its financial stabilisation. ?Today, the STC is managed in a more efficient way. There are also decisions regarding the supply of some products like the agreement with Mangalore Refineries and Petrochemicals Ltd (MRPL) that allowed us save more than Rs 350 million on petroleum products?, the minister stressed.

Above expectations

This is one reason why petrol and diesel prices have gone down. Except for opposition MPs who believe that the decrease should have occurred well before, the majority of Mauritians were happy to hear the news on Wednesday afternoon after the meeting of the Automatic Pricing Mechanism (APM) committee. Petrol went down from Rs 40.60 to Rs 32.50 per litre and diesel from Rs 30.20 to Rs 26.50.

As oil prices have decreased on the international market, petrol and diesel prices were expected to decrease on the local market since the last meeting of the APM committee. However, nothing happened at the time since the State Trading Corporation (STC) was indebted and needed funds to clear its debts. This time, the review seems to be even above expectations. According to the minister, the debts have gone down from Rs 2 billion in July 2005 to Rs 68 million at the end of 2006.

?To achieve such a decision for the new prices, the committee analysed the evolution of oil prices on the world market, the price paid by the STC for each cargo at their arrival in Port-Louis as well as the exchange rate. The same criteria have been applied since the introduction of the APM?, clarifies the STC managing director, Ranjit Soomarooah. As a result, the drop has been of 20 % on petrol ? the maximum authorised by the APM ? and 12.25% for diesel.

As for gas, the situation is quite different. ?When we take the accumulated losses on gas into consideration, the real price of the demijohn of 12 kilos should be of Rs 571.20 but the government has decided to maintain it at Rs 315?, comments the STC director. This is due to a decision taken by the government last December when it amended the Consumer Protection (Control of Price of Petroleum Products) to make it possible to review prices on a yearly basis. As the price of gas had been reviewed in October 2006, it is expected to remain the same until October 2007.

In fact, everyone agrees that the last meeting of the APM committee has been most positive. Even the Institute for Consumer Protection (ICP) finds no fault with the decisions. Its president, Mosadeq Sahebdin, is particularly happy that the price of gas is not on the rise. ?This decision goes in the right direction because the real price of gas is far higher.?

The Central Statistics Office is ?still studying the different possibilities for the decrease in the price of petroleum products has an impact on the cost of living?. However, chances are low that the drops have any repercussions on the cost of bus tickets or taxi fees?