PRAIA, March 31 (Xinhua) -- The Cape Verdean government announced on Monday the suspension of the automatic fuel pricing mechanism and imposed caps on fuel price increases from April to June in a bid to cushion the impact of rising global oil prices on households and businesses.
The announcement was made at a press conference by Vice Prime Minister and Minister of Finance Olavo Correia, who said the measure was aimed at preventing surging international oil prices from being fully passed on to domestic electricity, transport and food costs.
"To prevent the historic rise in Brent crude prices, which has exceeded 160 percent year on year, from being fully transmitted to the cost of living for Cape Verdeans, the government has decided to suspend the automatic pricing mechanism implemented by the Multisectoral Economic Regulatory Agency of Cape Verde (ARME)," Correia said.
Under the government-set limits for April, price increases will be capped at 8 percent for gasoline and regular diesel, 5 percent for butane gas and marine diesel, and 2 percent for diesel used in electricity generation as well as fuel oil.
Correia said the state would absorb a significant share of the costs arising from the current crisis to ensure continued fuel supply by oil companies without fully transferring the real price burden to consumers. According to him, the government will cover about 70 percent of the resulting deficit.
Under the measure, ARME will calculate fuel prices based on the variation limits defined by the government, with the aim of softening the impact of the global energy crisis on the archipelago.
The resolution, approved by the Council of Ministers, is intended to mitigate the impact of rising international fuel prices on energy costs and safeguard the country's economic and social stability. ■
