Mauritius Fuel Losses: STC Bleeds Rs 5 Per Litre, PSA Deficit Hits Rs 3.56 Billion

Mauritius's fuel pricing system is under severe financial strain, with the State Trading Corporation (STC) recording heavy losses on every litre of petrol and diesel sold at the pump — and a national stabilisation fund now sitting Rs 3.56 billion in the red. The situation was formally acknowledged at a Cabinet meeting held on Friday, 9 October, where ministers were briefed on the STC's deteriorating financial position in the distribution of petroleum products on the local market. **How bad are the losses?** According to figures presented to Cabinet, the STC is currently losing: - **Rs 5.05 per litre** on super petrol (mogas) - **Rs 5.01 per litre** on diesel (gas oil) These losses arise from the gap between what the STC pays to import fuel on international markets and the regulated retail prices charged to consumers at the pump — prices that are set by the government and cannot be changed without a formal review process. **What is the Price Stabilisation Account?** The Price Stabilisation Account (PSA) is a government-managed fund designed to act as a buffer between volatile global oil prices and local pump prices. When import costs rise above retail prices, the STC draws on the PSA to cover the shortfall — effectively subsidising fuel for consumers. When international prices fall below retail levels, the surplus flows back into the fund. The mechanism is meant to prevent sharp, sudden price swings at the pump. But when global oil costs remain elevated for a sustained period, the PSA can fall into deep deficit — which is exactly what has happened now, with the fund showing a shortfall of **Rs 3.56 billion**. **Who decides what happens next?** Fuel prices in Mauritius are not set by the market. They are reviewed and adjusted by the **Petroleum Pricing Committee (PPC)**, a technical body operating under the **Ministry of Commerce and Consumer Protection**. Any revision to pump prices — up or down — must go through this committee. With the PSA deeply in deficit and the STC absorbing losses on millions of litres sold each month, pressure is mounting on the committee to act. However, any upward price adjustment would directly affect household budgets and transport costs across the island. **What this means for Mauritians** For everyday consumers, the immediate concern is whether fuel prices will rise. If the government chooses to narrow the gap between import costs and retail prices to stop the PSA from bleeding further, drivers and businesses that rely on diesel — including fishermen, freight operators, and bus companies — would feel the impact directly. If no adjustment is made, the PSA deficit will continue to grow, raising questions about the long-term sustainability of the price stabilisation model and the STC's financial health as a state-owned enterprise. All eyes are now on the Ministry of Commerce and the Petroleum Pricing Committee for their next move. Source: ION News