Yaounde, Cameroon—The Minister of
Communication, government’s spokesman has revealed that the increase in the
fuel and domestic gas prices is a measure to rescue the country’s lone refinery,
SONARA which is at the verge of collapse.
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Issa Tchiroma, Communication Minister |
The state currently owes the refinery an estimated FCFA 300 billion
within the framework of the subsidy policy, whereas the total SONARA unpaid
bills vis-à-vis its partners and other suppliers, amount to FCFA 550 billion.
The refinery is thus at the verge of reaching a serious critical point
as its treasury does no longer permit it to obtain credit lines, which are
necessary to purchase sufficient crude oil to satisfy internal market demand.
In the phase of this situation, SONARA has been obliged to drop its production
capacity from 340 cubic meters per hour to 200 cubic meters per hour, to avoid
a total stop of its production units.
“SONARA, through which the state intervenes to subsidize hydrocarbons
prices at filling stations, is today threatened in its survival, by the
pressure exercised on its economic and financial balance through the weight of
its intervention in the process of implementing this subsidy”.
Since the last increment in fuel prices in February 2008 in Cameroon, the
price of crude oil at the world market has been rising. Government maintained
subsidies despite the persistent hike in crude oil and pressure from
international funding bodies to increase fuel prices.
Between 2008 and 2013, the government spent FCFA 1200 billion; more than
the 2014 investment budget of FCFA 1000
billion. Within the first six months of 2014, subsidy paid or due by the state
in this respect, amounts to FCFA 157 billion, with a cumulated amount, from
2008 to date, amounting to FCFA 1 357 billion.
The reduction in subsidies, the minister said will permit the government
to secure money for many social, educational and infrastructural projects,
necessary to improve the well-being of populations and to increase growth rate.
“The cumulated amount of government subsidy to hydrocarbons prices at
filling stations, that is FCFA 1 200 billion from 2008 to 2013, representing
120% of the 2014 public investment budget, five times the budget of the
Ministry of Public Works, four times the budget of the Ministries of Basic
Education, Secondary Education and Higher Education, all three together”
Minister Tchiroma revealed that the amount spent on subsidies would have
also permitted the construction of four hydroelectric dams, like Lom Pangar, six
referral hospitals, or the construction of 2400 km of tarred roads.
Gov’t has not completely
remove subsidies
Despite the hike in fuel and domestic gas prices, the minister of
communication said government has not completely abandoned consumers by putting
an end to the subsidy.
He explained that the subsidy has not been completely removed; it has
simply been reduced to reasonable proportion to be easily supported by the
State budget.
“This increase simply aims at bringing back the said subsidy to
affordable levels by the State finances”.
According to Issa Tchiroma, the prices of the hydrocarbons products at
filling stations exclusive of government subsidies are as follows:
-
Fuel, CFA 825 F per litre, with a difference of CFA
175 F
-
Gasoil, CFA 770 F per litre, with a difference of CFA
170 F
-
Kerosene, CFA 705 F per litre, with a difference of CFA
355 F
-
12 and half kg bottle of domestic gas, CFA 9230 F,
with a difference of CFA 2730 F.
Minister Tchiroma maintained that, despite the reduction of this subsidy
which resulted in the increase of hydrocarbon prices at filling stations, the
average of these prices in Cameroon still remains far under the average applied
in countries with the same level of development Cameroon.
By Ndi Eugene Ndi in Yaounde