Senegal lifted prices on subsidised fuels for a second time after last year’s surge in oil to alleviate a squeeze on the government’s budget.
As of January 7, a litre of diesel cost 755 CFA francs ($1.23), up from 655 CFA francs while the price of unleaded fuel rose to 990 CFA francs from 890 CFA francs, a Bloomberg report said.
But in Nigeria despite refusing to officially review prices up and paying heavy subsidy, the price of the product has continued to rise , selling for as much as between N300 to N600 in some states. Many Nigerians have continued to spend long hours in queues to buy fuel the product.
However, the increase was necessary to limit public spending on subsidies and redirect aid toward the most vulnerable households, Oil Minister Sophie Gladima told public broadcaster, Radio Television Senegalaise.
Government expenditures on fuel subsidies in Senegal nearly quadrupled last year to 580 billion CFA francs, according to initial estimates.
The most recent price hikes should allow Senegal to limit that cost in 2023 to about 450 billion CFA francs, Trade Minister Adbou Karim Fofana told French broadcaster TV5.
Like many of its neighbours, the west African country is facing a spiralling cost-of-living crisis. Surging energy and food prices have propelled inflation above 14 per cent.
Senegal’s President Macky Sall unveiled a relief plan worth about 500 billion CFA francs in November that includes rent subsidies and price caps on many basic goods to ease pressure on millions of households.
The start of oil and gas production this year may ease some strains on public coffers. Crude exports from the country’s offshore Sangomar field are expected to start in the second quarter, a facility for liquefied natural gas is set to come online over the following three months. The economy will grow more than 10% this year, according to Sall.
Aside the controversy surrounding Nigeria’s daily fuel consumption figure, many industry players believe that by retaining subsidy, Nigeria is also subsidising neighbouring countries. It is believed that much of the product is smuggled across the borders.
Emmanuel Addeh in Abuja