JOHANNESBURG – Angola will end petrol
subsidies and increase the price of other fuels, the
finance ministry said, after last year’s plunge in
global oil prices hammered the finances of Africa’s
second largest crude exporter.
In February, Angola slashed spending in its 2015
budget, widened its fiscal deficit projections and
said it would sharply increase borrowing.
Angola imports most of its fuel due to insufficient
refining capacity and it spent around 4 percent of
its 2013 budget on fuel subsidies, according to
Control Risks.
“Gasoline now joins the free price system, ending
the burden on the state of the cost of subsidies,” a
ministry statement seen by Reuters on Thursday
said, adding that the changes come into effect on
September 30.
“The ongoing effort to adopt realistic prices will
help strengthen social programmes and reduce
inequality, since subsidies benefit the most
favoured groups and encourage fuel smuggling to
neighbouring countries.”
Angola has been gradually increasing fuel prices in
recent months and has saved 110 billion kwanza
($1 billion) from reduced subsidies since October
last year, the statement said.
The price of diesel will increase by 25 percent to
75 kwanza per litre, although the state still
subsidises 21 percent of the cost, the finance
ministry statement said.
State-oil company Sonangol will now determine
the price of petrol, the finance ministry said.
Angola increased the price of gasoline last
September by 25 percent to 75 kwanza per litre.
The International Monetary Fund, which entered a
$1.4 billion loan deal with Angola in 2009, has
urged the southern African country to reduce fuel
subsidies to free spending for infrastructure and
encourage the building of refineries.
Fuel price increases have prompted widespread
protests in other African countries, including
Mozambique and Nigeria.
Angola, which has well-funded security services,
has not suffered from serious unrest after previous
fuel price rises.



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