Mauritius STC Loses Over Rs 5 Per Litre on Petrol and Diesel

The State Trading Corporation (STC), the government-owned body responsible for importing and distributing fuel in Mauritius, is currently recording losses of Rs 5.05 on every litre of petrol sold and Rs 5.01 on every litre of diesel — according to figures reported by Le Défi Media. These losses occur when the price at which the STC sells fuel to consumers — set by the government — falls below the actual cost of importing and distributing it. In other words, Mauritians are paying less at the pump than the fuel actually costs to bring to the island. **How fuel pricing works in Mauritius** Mauritius does not allow fuel prices to fluctuate freely with global oil markets. Instead, the government sets retail prices for petrol and diesel, and reviews them periodically. The STC acts as the sole importer of petroleum products, buying crude and refined fuel on international markets and selling it locally at the regulated price. When global oil prices rise — or when the Mauritian rupee weakens against the US dollar, in which oil is traded — the STC's import costs increase. If the government does not adjust pump prices upward to match, the STC absorbs the difference as a loss. **Why this matters** A sustained per-litre loss of around Rs 5 is significant. Multiplied across the millions of litres consumed in Mauritius each month by motorists, transport operators, and businesses, these losses can accumulate into hundreds of millions of rupees on the STC's balance sheet. This creates a dilemma for the government. Raising fuel prices would reduce the STC's financial burden but would directly increase the cost of living for households and raise operating costs for businesses — particularly in transport, fishing, and agriculture, where fuel is a major expense. Keeping prices unchanged protects consumers in the short term but places financial pressure on a state institution that may ultimately require a public bailout. The STC has historically received government support — including through the Petroleum Fund — to offset such losses, but the scale and duration of any shortfall determines how sustainable that support is. **What this means for consumers and the economy** For now, drivers at Mauritian petrol stations are benefiting from prices that do not fully reflect import costs. However, if global oil prices remain elevated or the rupee stays under pressure, the government will face growing pressure to either revise pump prices upward or find another mechanism to compensate the STC. Any future price adjustment would affect not only private motorists but also public bus fares, the cost of goods transported by road, and inflation more broadly — making fuel pricing one of the most politically sensitive economic levers in Mauritius. Source: Le Défi Media