The Malagasy government has reactivated the automatic fuel price adjustment mechanism, a system suspended since April 2026, to better manage pump price movements amid international market fluctuations.

Decided by the Malagasy government, the reinstatement of the automatic adjustment mechanism covers major petroleum products: SP95 premium gasoline, diesel, and kerosene. This system, adopted in Wednesday's cabinet meeting, provides for monthly price reviews at the pump based on international oil prices, the ariary exchange rate, and import and distribution costs.

"This is a continuation of the mechanism applied since the first half of 2026, suspended in April due to sharp increases in international prices, which could not be fully passed on to consumers," explains Cydolain Raveloson, director general of the Malagasy Hydrocarbons Office (OMH).

The system includes strict safeguards, with adjustments capped at 200 ariary per liter, both up and down, to limit sharp variations for consumers.

Gradual Increase

"This mechanism was temporarily suspended because of soaring global oil prices. Today, it is being reactivated as part of commitments made to technical and financial partners, particularly the IMF," explains the OMH director general.

This mechanism, established in 2025, had already been applied before its suspension in April 2026, a decision made to cushion the impact of rising international prices on household purchasing power. Despite the freeze, several adjustments had already been observed in preceding months.

Pump prices had notably reached approximately 4,860 ariary for diesel and 5,100 ariary for unleaded premium, amid tensions in global energy markets.

With the return of this system, authorities aim to gradually align local prices with actual supply costs while maintaining stability for households and transporters.

In April, Radonirina Lucas Rabearimanga, Minister of Energy and Hydrocarbures, already recalled the system's logic: "In the current situation, if the automatic price adjustment mechanism is maintained, we must apply a gradual increase of 200 ariary per month until December."

Ihariana Sarobidy