fuel prices: a solution diverting from the issue

The gas station managers´ strike will not take place…yet. The demonstration of solidarity held on Wednesday morning, April 13th, 2011 has equally been cancelled. The professional union of gas station managers (local GPGLSS) decided not to repell consumers, namely due to a certain victory. “The ministry is going publish a decree making clear that gas station managers´ profit margin and exploitation conditions would be preserved “, announced Martin Rakotozafy, the union´s president. 

The GPGLSS had set an ultimatum in order to pressure the ruling power and the oil companies to reach an agreement. Gas station managers intensively committed to support their suppliers. The threat to suspend sales targeted the state control over consuming prices. Gas station managers still believed in the possibility to run their business while making profits. 

The HAT´s minister openly displayed his skepticism about gas stations´strike but Mamy Ratovomalala finally had to give in. Consuming price control will be lifted and a 50 ar high rise per liter will come true. The GPLSS appeared satisfied and decided not to close its gas stations´ gates to consumers. Losses are off the point and profit margins are to be preserved. 

Minister Mamy Ratovomalala is not the sinlge one to have lost the battle. The HAT put an interdepartmental committee in place in order to avoid rising fuel prices. Apart from general inflation, such a rise is very unpopular especially since it is bringing the rregime´s  propagandist lies concerning fuel and food prices to dayligth 

Disappointed oil companies 

The oil companies are absolutely not delighted by the ministry´s decision in spite of the promise to let prices increase. Supply companies are all for most not losing out, but they have no wins either. The 50 ariary/litre high rise is far from satisfying for the supply companies expecting some 100 ariary/litre. The recent deal between the ruling power and the gas station managers is actually leaving the supply companies alone with far more losses 

The solution decided by the interdepartmental committee can potentially work, could the state subsidize retailers, as suggested by supply companies. This subsidy concerns the profit margin guaranteed by the state itself. But does the HAT can or ever want this really? The allowed price rise is at any rate not large enough for suppliers supporting the gas stations´ profit margin.   

The ruling power played a deaf hear to tax deletion proposals. Only an eventual alteration of the finance plan would decided about this. It is however not that likely, since the HAT is dying for increasing state returns. The HAT simply wants to compel fuel supply companies to give their profits up. The union replied that no state is allowed to impose rules on things that are not his. The issue is far from settled