Petrol prices comparatively low in Cameroon

Besides Senegal, CAR, Cote d’Ivoire etc. whose retail petrol price is lower than Cameroon, according to informed and unimpeachable sources;the prices of petroleum products in Cameroon are still much lower than in some countries, especially countries in West and Central Africa.

Despite the recent readjustment of prices at retail stations, petrol still sells at 650 frs per litre, far lower than in countries like Senegal and Cape Verde where it sells at 894frs and 880frs respectively.

The government of Cameroon kept the prices of fuel stable and affordable to the average Cameroonian since 2008 through a sustained increase in petroleum subsidy. This was in spite of the ever rising prices of petroleum and petroleum products on the world market.

Agencies like the Hydrocarbons Prices Stabilization Fund (CSPH), SCDP and SONARA were used by government not only to regulate the prices of fuel and fuel products but to also ensure uninterrupted supply of these products throughout the national territory and irrespective of the situation at the world market.

The build up to the recent price restructuring began in 2008 when food prices hit a record high. For several years, government ignored pressure from the IMF and World Bank to withdraw the subsidy on fuel which they considered suicidal to Cameroon’s economy.

But the subsidy became increasingly unbearable for the government, following the sustained hikes in prices of crude oil on the world market. This was all the more because, the sole refinery in the country, SONARA, imports all the crude that it refines from the world market. Even the liquefied gas that is used in homes is also imported.

It should be noted that between 2004 and 2013 the price of crude more than quadrupled on the world market (rising from 35 dollars in 2004 to 110.43 dollars in 2013). This increase in prices on the world market translated into the home market, with prices of petrol more than tripling between 2009 and 2013, while those of kerosene and gas oil more than quadrupled during the same period.

To prevent its citizens being affected by the price hikes government made enormous sacrifices in terms of subsidy to fuel consumption. During the period from 2008 to 2013 government subsidy to fuel and cooking gas increased by more than three folds ie rising from 142 billion in 2008 to 434 billion in 2013 for white petroleum products (super, gas oil and kerosene) and from 13 billion to 36.5 billion for cooking gas.

It is noteworthy that the amount spent as subsidy to petroleum in 2013 alone corresponds to 120% of the total investment budget for 2014; it is five times the budget of the ministry of public works and four times the combined budgets of the ministries of Higher Education, Secondary Education and Basic Education put together. It can also finance the construction of four hydro-dams, six reference hospitals and 2400 km of tarred road.

Because subsidy on fuel only benefits the rich who can afford cars, and not the poor who form the majority in Cameroon, the government decided to curtail the billions it has been pumping on fuel consumption. These funds would be diverted to other more beneficial investment and socio-economic projects, goverment authorities say.

Then to buffer the shock of an ensuing hike in food prices, the government has taken some accompanying measures. The salaries of state workers have been raised by 5%, while some sectors of the economy have witnessed appreciable tax reductions. Also, taxi fares have been reviewed upwards. Meanwhile, studies are ongoing towards an increase in the minimum wage for all sectors in the country.

Prices of petrol (super) in some West and Central African countries as of July 2014 Country Super in FCFA/L Senegal 894 CAR 880 Cape Verde 818 Mali 770 Cote D’Ivoire 741 DRCongo 741 Burkina Faso 736 Ghana 736 Gambia 732 Mauritania 712 Guinea Conakry 693 Togo 660 Cameroon 650 Congo Brazza 595 Benin 559 Gabon 535 Chad 480 Guinea Equ 480

Source: CITAC AFRICA; Elaboration CSPH/AD2

Before New measures Products Average real price (2013) Price at the Pump Subsidy Super (in fcfa/l) 802,94 569 233,94 Kerosene (in fcfa/l) 683,52 350 333,52 Gasoil (in fcfa/l) 771,52 520 251,52 Cooking gas ( 12.5kg) 11200 6000 5200

After new measures Super (in fcfa/1) 802,94 650 152,94 Kerosene (in fcfa/1) 683,52 350 333,52 Gasoil (in fcfa/1) 771,52 600 171,52 Cooking gas 12.5kg bottle) 11200 6500 4700