On Tuesday 31 January 2023, an information meeting was held in the conference room of the HPSF between four ministers and trade unions, trade union confederations and grassroots unions.
The expectations and analyses surrounding the increase in fuel prices are becoming increasingly clear. During the meeting between the main actors on 31 January 2023, it emerged that fuel will rise from 630 FCFA to 730 FCFA, an increase of 100 FCFA; diesel will rise from 545 to 720 FCFA from 1 February.
On the other hand, the price of paraffin will remain at CFAF 350. The same goes for domestic gas, which will remain at its former price of CFAF 6,500. The government, despite the inevitable imminent increase, will continue to subsidise these petroleum products. Otherwise the expected increase in fuel prices would have been 1000 FCFA.
In response, the unions, while understanding the inevitability of the increases, insisted on accompanying measures, notably purchasing power, which must be increased rapidly. In short, the government must take measures to ensure that all negative impacts are controlled.
During his address to the nation on 31 December last, Paul Biya emphasised that his government has, in 2022, released a large envelope of CFAF 775 billion to support prices at the pump, including those of natural gas. According to the PR, the subsidy envelope should be reduced or even abolished, which will require the consumer to bear the additional costs.
This view is shared by the IMF, which believes that the subsidy is holding back public investment. “The impact of higher international oil prices on the budget is mixed, as the increase in oil revenues is more than offset by a substantial increase in fuel subsidies aimed at keeping administered retail fuel prices unchanged. The increase in subsidy costs is thus offset by reductions in other expenditures, notably those for investment projects.
The IMF staff also points out that the current level of fuel subsidies is unsustainable and advises the authorities to gradually increase pump prices from next year .