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Managing fuel prices in Madagascar

Madagascar is a fuel-importing country. The Malagasy State, concerned about protecting the population from higher prices, sets with the oil companies a maximum price of fuel at the pump which is sometimes below the real cost of supply. The State pays the difference between the price at the pump and the real supply cost. However, by spending a great deal of money to limit the increase in fuel prices, the Government is reducing resources available to support pro-poor policies. The Government should give priority to the automatic adjustment of retail prices in line with worldwide fluctuations of oil prices, increase monitoring of the different components of fuel prices, promote price competition and effectively regulate the sector. http://wrld.bg/KkaG50vX5Nu

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