The International Monetary Fund (IMF) supports the Mozambican government decision to increase fuel prices as the IMF believes the step will help the African country in facing its struggles with foreign debt, Zitamar reported.

According to Club of Mozambique, the government announced mid-March an increase in the price of gasoline, diesel and gas. Gasoline increased by 12%, diesel by 13.2%, and the price of butane cooking gas hiked by 4.3%. The price of compressed natural gas remained almost the same.

In its press release, the IMF stated that “this measure is an important step in the process of reforming the fuel sector in Mozambique and we agree that any effect on the well-being of the most vulnerable families should be offset.”

The IMF noted that fuel prices have in general been below the market price and the prices charged by neighboring countries.

“This had been possible due to a subsidy that compensated fuel companies for the difference between the regulated prices and the cost of importing those products” it added.

It continued: “This subsidy, as well as being very onerous on the state coffers, has benefited the richest, who have the biggest cars and on average consume much more fuel.”