In 2023, the State will reduce the amount allocated to the fuel price subsidy. And as a consequence, these products will cost more at the pump.
The 2023 finance law has provided an envelope of 350 billion FCFA for fuel subsidy (super, diesel, and kerosene) during the year 2023. This represents half of the nearly 700 billion FCFA devoted to this expenditure in 2022.
“The grants will continue. With less or more envelopes, the future will tell,” said Budget Director, Cyrille Edou Alo’o in an interview with Cameroon Business Today.
Concretely, the nearly 775 billion FCFA injected in 2022 by Cameroon in the subsidy of petroleum products, including domestic gas, is three times the estimated cost (250 billion FCFA) of the reconstruction of the country’s only refinery (Sonara ).
It must be said that this heavy subsidy is contested by the IMF. According to a press release from the institution published following consultations with the Cameroonian authorities conducted in the country, from June 15 to 29, 2022, gradual abolition of the said subsidies would contribute to a substantial strengthening of the mechanism for transferring funds intended for public investment.
According to the IMF, the impact of the current rise in international oil prices on Cameroon’s budget remains mixed, as the increase in oil revenues is more than offset by a substantial increase in fuel subsidies at the pump estimated at 2, 9% of gross domestic product(GDP), compared to 0.5% in 2021.