Urgent: towards the increase of fuel prices in Cameroon

Urgent: towards the increase of fuel prices in Cameroon

N Melo
by N Melo
July 15, 2022 0

Urgent: Towards the increase of fuel prices in Cameroon

Cameroon subsidizes the price of fuel to more than 300 billion CFA francs

• The Russian-Ukrainian crisis complicates things

• According to our sources, we will see the increase in the price of fuel in the days to come

Fuel prices will be revised upwards. This is apparent from our generally well-informed sources.

Indeed, in the specific case of petroleum products, in particular fuel and domestic gas, it is foreseeable that the envelope often provided by the government within the framework of the subsidy for petroleum products will be largely exceeded. Consequently, the public authorities find themselves obliged to revise the prices at the pump upwards, as have been done since the beginning of the Russian-Ukrainian crisis, the oil importing and exporting countries.

The causes of the increase

It is therefore with a broken heart that the government will find itself obliged to revise fuel prices upwards. Cameroon, like many countries, is the victim of a number of unfortunate circumstances.
First, the coronavirus pandemic, which has led economically to a deregulation of supply chains in international markets and an unprecedented rise in the prices of consumer products. Result of the races, the rate of inflation exploded in almost all the countries of the world.

Europe and North America are also the first affected, they who were used to an inflation rate of 2%. In Turkey, inflation reached more than 70%, France, more than 5%, Côte d’Ivoire, 4.6%; 27% in Ghana, 17% in Nigeria, almost 9% in the USA, almost 8% in Germany…

Second cause, the Russian-Ukrainian war. These two countries are the main suppliers of cereals, oilseeds, gas and oil in international markets. Russia provides 85-90% of the world’s refined crude. This came to complicate an already deleterious situation. However, Cameroon, with an inflation rate of 4.6% in the first quarter of 2022, is rather a good student.

Subsidize, yes but…

Unfortunately, the economies of the world are interconnected. An “earthquake” in one country x can shake all the others. Nevertheless, if Cameroon’s economy was able to withstand the shock, it is also thanks to the panoply of measures deployed by the government, in particular the exemption from fiscal and customs taxes on the import of almost all products consumer goods, suspension of the pre-shipment conformity assessment program, reduction in the cost of freight to be included in the customs value, support for the prices of petroleum products and domestic gas, including the cost for the public treasury extends beyond 100 billion per month; direct-to-consumer sales campaigns for basic necessities, etc.

It is thanks to all this that Cameroon has been able to stay out of the regular shortages and other increases that affect other countries.
This multifaceted support will continue. However, adjustments will have to be made, otherwise it will be the major projects initiated by the President of the Republic and essential for the well-being of the populations that will be impacted. We must support yes, but within the limits of what is economically possible, in view of the unfavorable evolution of the costs of factors including energy, times, maritime transport, export taxes imposed by supplier countries .

N Melo
NM
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