By John Ikani
Senegal has increased the prices of subsidized fuels for the second time in response to the rising cost of oil and the strain on the government’s budget.
As of January 7, the price of diesel has increased to 755 CFA francs per liter ($1.23) from 655 CFA francs, and unleaded fuel has risen to 990 CFA francs per liter from 890 CFA francs, according to Bloomberg.
The country’s Oil Minister, Sophie Gladima, stated that the increase was necessary to limit public spending on subsidies and redirect aid to the most vulnerable households.
Government expenditures on fuel subsidies in Senegal nearly quadrupled to 580 billion CFA francs in 2021, but the recent price hikes are expected to limit the cost to approximately 450 billion CFA francs in 2023, according to Trade Minister Abdou Karim Fofana.
The rising cost of energy and food has caused inflation in Senegal to exceed 14%.
To alleviate the pressure on households, President Macky Sall unveiled a relief plan worth about 500 billion CFA francs in November, which includes rent subsidies and price caps on basic goods.
The start of oil and gas production in Senegal this year is also expected to help ease some of the strain on public funds.
Crude exports from the country’s offshore Sangomar field are set to begin in the second quarter of 2023, and a facility for liquefied natural gas is expected to come online over the following three months.
Sall predicts that the economy will grow more than 10% in 2023.
