Tunisia,Fuel,Subsidies,Deficit,Mongi Marzouk,Minister of Energy and Mines,Oil

Tunisia to ‘Link’ Fuel Subsidies to International Prices

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A day after an actual oil producer, Qatar, announced it would do away with gasoline and diesel subsidies in May (i.e. next month) to plug a budget deficit that the IMF believes will be around 2.7% in 2016, after having already raised fuel prices by 30% in January, Mongi Marzouk the Tunisian the told Shems FM on Wednesday, April 27, “fuel prices in Tunisia will be linked to international market prices”. ¬†No date was specified, although Marzouk further told ShemsFM that the would make an announcement ‘in the coming weeks’.


This isn’t an end to subsidies from a non-major producer with twice the budget deficit as Qatar, but rather a ‘linking’, as Minister Marzouk explained “fuel prices will rise in Tunisia as and when their prices rise on other international markets; as falling prices in those markets will also lead to their reduction in the Tunisian market”.


Minister Marzouk adding vaguely “products consumed by the poor classes and low income people, will always be subsidized by the state and available at very affordable price.” without specifying how this would be done.


It seems the Minister of Energy and Mines is testing the waters if public opinion through his statements. A rise in fuel prices will provoke a reaction undoubtedly including what fears…protests and unrest.


Interim Prime Minister Mehdi Jomaa made moves to reduce the subsidies in 2013, and more recently Finance Minister Slim Chaker proposed reducing energy subsidies from 850 million TND in 2015 to 550 million TND in 2016 as part of an attempt to bring the budget deficit to below 4% in 2016.