Government has given the local oil industry up to January 14 to reduce fuel prices by almost 20 percent in line with the falling international crude oil prices.
The price of crude oil on the international market has been on a freefall since June last year were it was around $118 per barrel to $70 per barrel as of December.
In June 2014 the freight on board (FOB) prices at Beira were at 0.88 per litre for diesel and 0.86 per liter of petrol. These have since gone down to 0.57 and 0.52 per litre respectively as at end of December 2014.
However, local fuel traders have not adjusted their prices to reflect this trend.
Energy minister Samuel Undenge on Friday told journalists that in line with the FOB December rates, fuel prices should be pegged at $1,20 for diesel and $1,32 for petrol.
Fuel currently trades at an average $1.50 for petrol and $1.46 for diesel.
“Currently, pump prices are higher than those obtained using the December 2014 FOB prices as companies claim that they are disposing of old stocks bought much earlier,” Undenge said.
“I expect the December FOB based maximum pump prices to take effect by 14January 2015.”