Angola says it has decided to reduce its spending on petrol
subsidy.
After the cabinet meeting on Thursday in Luanda, the
country’s capital, Manuel Junior, minister of state for economic coordination,
said the subsidy reduction will take effect from Friday.
He said this would lead to an increase in the price of
petrol from the current 160 kwanzas (about $0.27) per litre, to 300 kwanzas
(about $0.51) per litre.
The change in price represents an 87.5 percent rise, starting from 1.00 am, on Friday.
Subsidies on other petroleum products, such as diesel,
cooking oil, and gasoil (a type of diesel), will remain unchanged, he said.
The minister said the removal of petrol subsidy is “a
necessary measure to promote solid economic growth capable of addressing the
serious problems facing the country”.
Junior said Angola’s expenditures on fuel subsidies amounted
to $3.8 billion in 2022.
On her part, Vera Daves, minister of finance of Angola, said
removing the petrol subsidy was a sovereign decision of the Angolan state and
was not influenced by external pressure from the International Monetary Fund
(IMF).
According to a government report obtained by Xinhua,
Angola’s ministry of finance had put forth a proposal for a phased reduction of
petrol subsidy beginning in the second quarter of 2023.
The report also recommended a gradual and progressive
removal of the subsidy on diesel and illuminating oil prices, with the process
projected to last until 2025.
Angola has the fourth-lowest petrol prices in the world
($0.28) after Libya, Iran, and Venezuela, according to data compiled by
Globalpetrolprices.com.
According to a report released on May 11 by the Organisation
of the Petroleum Exporting Countries (OPEC), Angola is Africa’s top crude oil
producer, with production averaging 1.06 million barrels per day in April.
The country’s petrol subsidy cutback comes at a time when
Nigeria, Africa’s major oil-producing country, is experiencing post-subsidy
realities.
President Bola Tinubu, in his inaugural speech on May 29,
made a pronouncement that the petrol subsidy payments had stopped.
However, the president’s media team later clarified that the
implementation of the policy would commence this month.
But the Nigerian National Petroleum Company (NNPC) Limited
said it adjusted the price of petrol, across its retail outlets — a situation
typical of a subsidy-free regime.
The national oil firm said the adjusted pump price was in
tandem with market realities.
Explaining the rationale behind NNPC’s move, Mele Kyari, the
national oil company’s group chief executive officer (GCEO), said the removal
of the petrol subsidy would promote competition and regulate consumption.
“The prices we are seeing today at our station are the
current market price of the commodity. So, what this means is that prices in
the market can go down at any time and of course, the market will adjust
itself,” he had said.
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