The State Trading Corporation (STC) was set up by an Act of Parliament of October 1982 (amended in 1988), to be the trading arm of the Government of Mauritius. It operates under the aegis of the Minister of Industry, Commerce and Consumer Protection.
It is administered by a Board of nine members comprising a Chairman appointed by the Minister with the approval of the Prime Minister, 5 ex-officio members nominated by 4 Ministries and one by the Mauritius Port Authority, as well as 2 independent members.
A Chief Executive Officer, appointed by the Minister with the approval of the Prime Minister, is responsible for the execution of the policy of the Board and for the control and management of the day to day business of the State Trading Corporation.
STC has been entrusted with the responsibility of importing certain essential commodities including all petroleum products and Liquefied Petroleum Gas (LPG) traded in Mauritius. STC also supplies the domestic market with all its requirements in Wheat Flour and non-Basmati Rice.
STC’s Business Plan forecasts a turnover of over Rs 42 billion for the financial year 2013.Petroleum
STC imports some 1.3 million mt of 7 categories of petroleum products, namely :
White Oils : Super Unleaded Gasoline, Automotive Diesel (50 ppm sulphur), Marine Diesel
(2500 ppm sulphur) and Jet A-1;
Fuel Oils : HSFO 180 CST CC, HSFO 180 CST SR, and HSFO 380 CST SR.
All these products are sold to four Oil Companies engaged in storage and distribution to meet domestic market needs across Mauritius as well as the international markets for aviation and bunker fuels. STC also covers the needs of the Central Electricity Board in Fuel Oils for power generation.
All petroleum products are currently sourced directly from Mangalore Refineries and Petrochemicals Ltd (MRPL) a refinery located in India some six to seven sailing days from Port Louis. They are transported by a dedicated tanker under Mauritian flag designed to carry them all in segregated tanks on a 22-day shuttle. Additional voyages by other tankers are also required occasionally to carry the entire requirements of Mauritius in Black and White Oils.
Liquefied Petroleum Gas (LPG)
STC procures and supplies about 66,000 tons of LPG to meet the residential and industrial demand of Mauritius. LPG represents the main source of cooking and water-heating for 98% households and the retail price is heavily subsidized for 6 and 12-kg bottles destined for residential use.
STC imports basic long-grain white rice (20,000 mt) per annum to meet popular demand representing about 20% of the market which is otherwise liberalized and occupied mainly by various luxury or premium varieties. Rice is procured on the world market after periodic Requests for Quotations (RFQ) attracting a large number of offers. This process allows STC to benefit from full market play and obtain better quality at lower prices than it previously obtained by annual tenders. Rice is sold to wholesalers for retail at a heavily subsidized price that has remained unchanged since July 2006.
STC also imports small volumes of Basmati Rice whenever it is felt that consumers need a reference product to better exercise their choice among a multitude of such rice offered on the market.
STC supplies the market with 100,000 tons of Wheat Flour yearly at retail prices fixed since December 2008. At 225 grams per capita, Wheat Flour remains the main staple food other than rice. Efforts are currently underway to sensitize the market to the benefits of shifting eating habits from refined white Flour to the more nutritious Whole Wheat flour which is now also offered at similarly subsidized prices despite the initially low demand volumes.
STC was not conceived to operate on a profit-making basis in respect of essential commodities under its control. It, therefore, operates its lines of business in Gasoline, Diesel, LPG, Flour and Rice for domestic consumption and public transport strictly on cost-basis with no profit mark-up. However, it does practice a reasonable competitive commercial mark-up on all its international trade transactions such as bunker supplies and commercial civil aviation supplies.
Surpluses generated in its day to day purely commercial transactions are currently utilized to absorb the trading losses arising from subsidies rather than paid as dividends to its sole shareholder, the Government of Mauritius.
Over and above those commitments, STC has accumulated some Rs 1.2 billion as reserves over the past three financial years. It has, thus, regained its financial health after absorbing unfortunate hedging losses sustained in 2008 with the collapse of the “Oil Price Bubble” that swelled to its limit in the middle of that year.