End-of-year speech: Biya's confession on imminent fuel price hike!.

The elastic catalogue of dire problems include inadequate water and electricity supply, garbage mountains on streets, bad or no roads, crushing debts owed teachers who constitute some 34.7 percent of the civil service, pervasive corruption and above all sporadic shortage of fuel, which should be the driving force of the economy.

In the president's own confession in his December 31, 2023, end-of-year speech to citizens, he said: "Over the past weeks, you were faced with the shortage of petroleum products, suffering many inconveniences as a result. To address this situation, I have instructed the Government to take urgent measures to ensure constant supply…".

He added that: "However, the challenges in the sector are broader and more complex. You must be aware that to maintain pump prices of fuel at their current levels, which are far below those in neighbouring countries, the State has to make huge financial sacrifices to subsidise petroleum products”.

"The burden of these subsidies weighs heavily on our budget and significantly reduces the much-needed resources to address other problems facing our people," he noted. 

Because of that crushing cost of fuel subsidies, the Head of State recalled that last year, "government increased slightly the pump prices of fuel. As a result, the subsidy on petroleum products decreased from over 1,000 billion CFA francs in 2022 to around 640 billion CFA francs in 2023".

He however conceded that: "Subsidy continues to weigh heavily on public coffers. Though we will most certainly have no choice but to reduce it further, we will ensure that the requisite adjustments do not significantly impact the purchasing power of households".

That goes beyond a confession to serve as a sufficient notice that fuel prices will spike again this year at a time the President said inflation was held at 6.7 percent, though some basic commodities had inflation in double figure and were still shooting to the roof.

The looming increase is in respect to one of the conditions of the International Monetary Fund, IMF, which demands progressive removal of fuel subsidies.

Following a similar speech last year, as from February 1, 2023, a litre of super costs 730 FCFA, an increase of 100 FCFA (+15%) compared to the 630 FCFA of yesteryear. A litre of diesel is sold at 720 FCFA, compared to 575 FCFA previously, which corresponds to an increase of 145 FCFA (25.2%). The litre of oil sold to manufacturers by the Cameroon Petroleum Depots Company, SCDP, costs 410.19 FCFA, compared to 560.19 FCFA, an increase of 150 FCFA (36.5%). Only the price of kerosene remained stable at 350 FCFA per litre as did that of domestic gas (6,500 FCFA for a 12.5 kg bottle).

When that increase was removed, smuggled fuel from Nigeria became expensive and local filling stations, especially in border Divisions that had folded up, resumed sales. But with the scarcity, fuel smuggled from Nigeria, estimated at some 30 percent in Cameroon markets, retuned to negatively impact on filling stations that are folding up again.

The million dollar question is why should Cameroon be importing fuel when,   according to the World Data Ranking index, in August 2023, production of crude oil in Cameroon was 52.61 thousand barrels per day? Its reserves are estimated at 200,000,000 barrels, making it the 55th country in the world.

The National Hydrocarbons Corporation, SNH, at the end of April 2022, paid to the national treasury 205 billion FCFA from oil revenue, "after deduction of expenses" from the sales of 13.68 million barrels of oil including 8.19 million barrels for crude oil production and 876.33 million m3 for natural gas.

The higher oil revenue over the period is driven by a slight increase in production and a rise in crude oil prices. According to SNH data, production rose from 13.25 million barrels in April 2021 to 13.68 million barrels in April 2022, up 3.24%. The price of a barrel of oil exceeded $100 (59,966 FCFA) in 2022.

Should Cameroonians not have had cheap fuel prices even without subsidies? Why compare national prices of fuel with neighbouring countries when the minimum wages in those countries more than triple that in Cameroon?

The National Refining Company, SONARA, the only refinery, does not refine the top quality grade of crude produced in Cameroon but would the export of the local brand not have been compensation to keep the subsidies on? Why has SONARA not been refurbished since the fire that ravaged some of its facilities some four years ago, with promises of doing so every year? Why should such an investment, which in other countries make windfall profits, be the largest debtor of all state enterprises in Cameroon with 374 billion FCFA owed to crude oil and finished petroleum product traders and suppliers as at the last count?

President Biya explained in his speech that, "ultimately, the rehabilitation of SONARA, which must be expedited as I have instructed, should help to improve the situation in this sector".

He recalled how he has "repeatedly ordered the Government to streamline public spending and find new ways and means of boosting public resources".

Regarding the reduction of public spending, he said "I have strongly reiterated my previous instructions to the Government to reduce recurrent expenditure”.

“Actions implemented to combat corruption and misappropriation of public funds are essential for protecting public resources. They will be intensified in the coming year," reiterated like in previous years. 

If there is a tepid political will to combat corruption, would Article 66 of the constitution of 1996 not have been in force? Without declaration of assets, corruption will continue to annihilate the economy and push fuel prices to shatter the ceiling in an oil producing country like Cameroon that has to depend on import and smuggled fuel. 

At The Guardian Post, we appreciate the Head of State for his brilliant mastering of the horrendous challenges ordinary compatriots face daily. But we can, and should have a choice. It should begin with Mr. President promulgating the bill on declaration of assets long passed by parliament to confront corruption, which is ravaging the economy in every facet for the benefit of a handful of overnight billionaires in public service and crooked contractors.