Mozambique will hike food and fuel prices but will offer other aid to the poor in the hope of averting a repeat of last year's deadly riots, development minister Aiuba Cuereneia said on Wednesday.

The government will phase out subsidies on fuel starting in April, but instead offer transport passes for students and workers, the minister said in state media.

Subsidies on bread and rice will end in June, but families earning less than about two dollars a day -- meaning about 90 percent of Mozambicans -- will instead receive food handouts, the minister added.

Cuereneia said the savings from the subsidies would be used to pay for the new benefits.

"We will also redirect the money from the price control measures that are ending. For example, we are going to use the money from the subsidies for fuel, bread and rice," he said.

Government last year lifted subsidies, causing an overnight increase in prices on September 1 that sparked rioting that left 14 dead and hundreds wounded.

Aiming to quell the unrest, Maputo restored the subsidies, even though rising global fuel and food prices and the weaker local currency meant government could no longer afford to pay for them.

"After evaluating the situation, it is clear that the international picture is far from improving, which will have negative consequences for our country," the minister said.

The finance ministry already announced earlier this month that it would need to increase the national budget to pay for the subsidies. The minister gave no details on the budgetary implications of the new measures.