By John Ikani
Cameroon’s government announced on Tuesday that fuel prices will soar by as much as 25% starting Wednesday, following increased pressure from the International Monetary Fund to cut fuel subsidies.
According to a statement from the Prime Minister’s office, starting on February 1st, drivers will see a 15.4% hike in petrol prices and a 25.2% increase in diesel prices, while fuel sold to industries will be priced at 560.19 CFA francs ($0.9317) per litre.
The statement which explained that the change was made after discussions on how to balance the country’s finances amidst rising fuel prices globally, added that the government did take steps to ease the impact, including a 5.2% boost in civil servant wages, as well as a limit on the cost of lamp oil and household gas.
It went on to note that talks to increase the minimum wage in the country will begin soon.
On Monday, the IMF reached a staff-level agreement with Cameroon for $74.6 million in financing, which is contingent upon approval from the IMF Executive Board.
The authorities informed the IMF that they are dedicated to reducing the costly fuel subsidies, which are deemed unsustainable given the current global oil price projections.
The IMF noted that Cameroon’s overall fiscal deficit for 2022 is expected to decrease to 1.7% of GDP, supported by the country’s continued recovery, higher oil prices, and non-oil tax revenue.
The Fund has been advocating for years for Cameroon to reduce its fuel subsidies, which are estimated to reach 2.9% of GDP in 2022.
In comparison, these subsidies represent six times the budget allocated to agriculture, four times the budget for health, and over three times the budget for energy and water.
