Exploring the Impact of Taxes and Contributions on Fuel Prices in Mauritius

Category: News

Citizen Nishal Joyram's recent 22-day hunger strike, in which he demanded lower fuel prices (gasoline and diesel) in response to falling oil prices on the global market, has brought attention to the issue of inflation in Mauritius.

The root cause of inflation in Mauritius

The root cause of inflation in Mauritius is primarily due to the import prices that the country must pay for daily consumer products. However, the high fuel prices cannot be solely attributed to this exogenous factor. The State's imposition of various taxes and contributions on each liter of fuel also plays a significant role, raising concerns about tax fairness in society.

To fully understand the issue, it is important to first consider the international economic context of petroleum product prices and the mechanism for setting fuel prices in Mauritius. World oil prices are determined by supply and demand, and are influenced by factors such as production from OPEC exporting countries. However, in Mauritius, fuel prices are set by the State Trading Corporation (STC), a government-controlled organization with a monopoly on the import of petroleum products.

According to STC figures, the price of gasoline has risen from Rs 44 per liter in December 2019 to Rs 74.10 as of May 2022, despite a decrease in the world price of oil. This significant increase in fuel prices is primarily attributed to taxes and contributions imposed by the government, which account for 44.53% of the retail selling price.

Fuel prices also have a ripple effect on the economy, as rising prices lead to an increase in the cost of living. This has been seen in the recent 11.9% inflation rate in November 2022.

It is imperative for the government to address this issue by re-evaluating the taxes and contributions imposed on fuel, as well as promoting transparency and fairness in the pricing mechanism for fuel in Mauritius.

Property Finder Mauritius

2023-01-16 08:13:33

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