In Madagascar, fuel pricing has once again become a major economic concern as the Ministry of Energy and Hydrocarbons reveals a worrying trend: the FOB (Free On Board) price of diesel its import cost before additional charges has already surpassed 6,000 ariary per liter. This figure highlights a growing gap between the actual cost of fuel and the prices currently applied at the pump.
At present, diesel is sold at around 4,660 ariary per liter, a price that has been maintained despite fluctuations in the international market. However, this pump price does not reflect the full pricing structure. The final cost of fuel typically includes several additional components such as transportation fees, logistics costs, distributor margins, as well as various taxes and levies.
The fact that the FOB price alone already exceeds 6,000 ariary means that, even before adding these extra charges, the real cost of diesel is significantly higher than what consumers are currently paying. This situation indicates a substantial shortfall that must be absorbed either by the government or by companies in the sector, increasing pressure for a price adjustment in the near future.
This upward pressure is largely driven by the international context. Geopolitical tensions, particularly in the Middle East, continue to impact global oil prices, while rising shipping and insurance costs further increase the import price of petroleum products.
Madagascar’s automatic fuel pricing mechanism limits monthly adjustments to 200 ariary per liter in order to avoid sudden shocks for consumers. However, given the widening gap between real costs and regulated prices, this system may no longer be sufficient to prevent an inevitable increase.
Although prices remain stable for now, current indicators suggest that a rise in pump prices is likely in the coming months. Such an increase could have significant consequences for the cost of living, transportation, and the broader Malagasy economy, which is already highly sensitive to energy price fluctuations.
