STATE TRADING

The following communication, dated and received on 6 November 2025, is being circulated at the request of the delegation of Mauritius.

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Question 1

Mauritius has notified the Agricultural Marketing Board (AMB) as a State Trading Enterprise affecting dry whole onions, fresh whole garlic, fresh whole potatoes, garlic seeds, onion seeds, potato seeds and bycatch fish (frozen fish).

In Section C of Part III related to AMB, Mauritius notes in relation to the types of entities other than AMB that are allowed to engage in importation/exportation and the conditions for participation:

Any company, partnership or trader may import such commodities as permitted from time to time by AMB, e.g. table potatoes, onions, onion seeds, garlic seeds and potato seeds. The import permits need to be endorsed by the AMB.

Can Mauritius please provide details on how many applications for import permits were received by AMB in 2022-2023, and how many import permits were granted?

Reply:

During the period 2022–2023, no import permits were granted owing to a combination of factors, including global trade challenges, unfavourable climatic conditions, and export restrictions in certain supplier countries.

Question 2

In section C of part III related to AMB, Mauritius notes in relation to how the resale prices of imported products are determined:

As AMB is run on sound commercial principles, imports are resold at cost c.i.f. Port Louis plus a percentage of expenses calculated to cover administrative, financial and storage costs.

To provide transparency on the process, can Mauritius provide details on how the additional administrative, financial and storage costs on imports are calculated? How does Mauritius ensure the additional costs are consistent with its WTO obligations and are not used as a disguised tariff measure?

Reply:

The applicable charges are:

·_        Electricity charges on containers

·_        Storage charges on containers

·_        Insurance

·_        Custom clearance

·_        Transport

·_        Storage charges in AMB cold rooms

Usually, these charges account for some 15% of Cost & Freight prices. There is no disguised tariff measure as AMB strives to procure imported goods at affordable prices to the public.

Question 3

Mauritius has also notified the State Trading Corporation (STC) as a State Trading Enterprise affecting petroleum products (white oil and fuel oil), liquefied petroleum gas (LPG), long grain white rice and wheat flour.

In sections F of part III related to STC, Mauritius notes in relation to how the resale prices of imported products are determined:

The resale prices for mogas and gasoil (10 ppm S) used on the domestic market are determined by the Petroleum Pricing Committee (PPC). For the products sold for the international market like Jet A1 for civil aviation, Marine Gas Oil and fuel oils (Very Low Sulphur Fuel Oil 0.5% S (VLSFO 180 CST) for marine bunkering, the prices are determined by the STC.

The retail price for LPG for domestic usage is determined by the Government through the Ministry of Commerce and Consumer Protection.

In section G of part III, Mauritius further notes in relation to whether long term contracts are negotiated by STC and whether STC is used to fulfil contractual obligations entered into by the government:

The Corporation does not have long-term contracts presently. The STC fulfils the contractual obligations entered into by the Government, whenever applicable.

Can Mauritius please outline the financial risk management practices and internal controls in place for STC's procurement and pricing of petroleum products and LPG? How does Mauritius ensure these processes are consistent with international market-based best practices, including strong transparency, accountability and commercial considerations?

Reply:

The State Trading Corporation (STC), a trading arm of the Government of Mauritius, is the sole importer of petroleum Products including Liquefied Petroleum Gas (LPG) meant for inland uses and it operates under a robust framework of internal controls and governance mechanisms designed to ensure transparency, accountability and financial prudence. With regard to petroleum products for bunkering, this market is liberalized since 2014.

(i) The Financial Risk Management practices in place are outlined as hereunder:

International Bidding:

Although STC is exempted from the Public Procurement Act of Mauritius for Goods for resale, the STC conducts Open International Bidding Exercise for the procurement of Petroleum Products and LPG, thereby ensuring competitive pricing and transparency.

Term Contracts with Indexed Pricing

Contracts are typically awarded on a Delivery At Place (DAP) basis, Port Louis, Mauritius, with pricing indexed to Platts benchmarks and reducing exposure to arbitrary supplier pricing.

Back-to-Back Settlement Arrangement

• STC maintains a back-to-back mechanism between its USD receipts and USD payables.
• Receipts in USD from local oil companies for international sales are directly used to settle supplier invoices denominated in USD.
• This arrangement ensures natural hedging and minimizes open foreign-exchange positions.

·_        Spot and Derivative Market Transactions

For the portion of local sales where payments are received in Mauritian Rupees (MUR), STC procures the required foreign currency from local commercial banks through:

·_        Spot purchases; and

·_        The use of foreign exchange swaps and forward cover arrangements.

Flexible Settlement Currency

In circumstances where USD liquidity in the domestic market is constrained, STC may, on a case‑by-case basis, settle invoices in an alternative currency mutually agreed between the parties involved.

Standby Lines of Credit

As a last-resort contingency measure, STC maintains standby credit lines and overdraft facilities with local commercial banks to ensure timely settlement of petroleum and LPG invoices in the event of temporary shortages of foreign currency or unexpected delays in cash inflows.

Risk Register

Each year, the Senior Management Team conducts a risk assessment to identify and evaluate strategic, financial, operational, and compliance risks. Mitigation measures are updated in STC's Risk Register, which is reviewed by the Audit and Risk Management Committee and thereafter approved by the Board. After approval, the Risk Register is shared with all Heads of Divisions and their assistants for dissemination within their respective divisions to promote risk awareness and monitoring.

(ii) The internal controls in place for STC's procurement, pricing of Petroleum Products and LPG, and processes for Mauritius to ensure consistency with international market‑based best practices, including strong transparency, accountability and commercial considerations are as hereunder:

(1)_ Procurement Controls

a._    Procurement Manual Frameworks

• STC operates under a comprehensive Procurement Manual (PM), which has been prepared by taking into consideration the guidelines of the Public Procurement Office (PPO) of Mauritius and which has been duly approved by the Board of the STC.
• The PM sets out the policies, procedures, and approval hierarchies governing all procurement activities, ensuring consistency, uniformity, transparency, and compliance with regulatory and corporate governance standards.
• It defines clear roles and responsibilities, segregation of duties, ethical conduct requirements, and documentation standards across all procurement stages.

b._    Pre-Bid Review and Legal Vetting

• Prior to the launch of any tender, the bidding document is prepared and circulated to a Procurement Committee comprising Senior Managers of STC for review.
• The Committee examines the tender documents to ensure accuracy, clarity, fairness and compliance with the Procurement Manual and relevant regulations.
• STC also seeks legal advice from the State Law Office to ensure that the tender and contract terms are legally sound and safeguard the Corporation's interests.

c._    Competitive Bidding and Evaluation

• Bids are advertised on the STC's website, Newspapers and Government e-Procurement website.
• All bids are evaluated using pre-defined technical and financial criteria in the bidding document.
• An independent Bid Evaluation Committee is constituted to evaluate the bids received and submit to the Procurement Committee a Bid Evaluation Report following which Management made recommendations to the Board of the STC.
• STC also seeks legal assistance to prepare Due Diligence Report on the lowest substantially responsive bidder.

d._    Publication of Bid Results and Contract Awards

• With regard to STC's transparency principles, tender results are published on the Government's e-Procurement website.
• Additionally, the Notice of Award of contract is published on the STC's website, ensuring that stakeholders and the public are informed of procurement outcomes.
• These disclosures strengthen public trust and accountability in STC's procurement operations.

e._    Contract and Performance Monitoring

• Supplier performance, delivery schedules, and product quality are systematically monitored.
• Contracts cater for the commercial terms and conditions, such as performance security in case of default and payment terms which ensure that final payment is affected after delivery of products, to safeguard STC's interests.

f._     Auditing

• Regular internal audit reviews are carried out to ensure compliance with corporate governance standards.
• The Audit and Risk Management Committee (ARMC) of the Board (a sub-committee of the Board of STC) oversees all audit findings and risk issues.
• In addition, the National Audit Office (NAO) provides external and independent assurance on procurement practices.

(2)_ Pricing Controls

(i)_          Petroleum Products

a. Formula-Based Petroleum Pricing Mechanism (PPM)

• Prices of Mogas and Gas Oil are determined using a transparent, formula-based mechanism established under the Consumer Protection (Control of Price of Petroleum Products) Regulations.

·_        The formula ensures that local prices reflect international market prices (Platts quotations), premium received through international bidding exercise and also incorporate relevant local cost components, taxes, and statutory contributions.

b. Petroleum Pricing Committee (PPC)

• The PPC, comprising of representatives from Ministry of Commerce, Ministry of Finance, Ministry of Energy and Public Utilities and also independent members, verifies and validates price computations.

·_        This multi-stakeholder's approach enhances transparency and integrity in the pricing process.

c. Transparency and Public Disclosure

• Each price adjustment is accompanied by a Press Communiqué issued by the STC.

·_        The published price structure provides a breakdown which disclose all cost elements and levies, ensuring openness and public understanding.

d. Price Stabilization Mechanism

·_        A Price Stabilization Account is maintained to absorb the impact of sudden fluctuations in international petroleum prices on the domestic market.

(ii)_         Liquefied Petroleum Gas (LPG)

·_        The price of LPG is fixed by the Government and is a subsidized product.

Through these internal control measures encompassing transparent procurement, formula-based pricing, multi-tiered approval, independent audit oversight, and public disclosure, the STC ensures that its operations in the procurement and pricing of the Petroleum Products and LPG remain fair, accountable and consistent with international market-based best practices.

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