Gov’t increases fuel prices at last!.

A release, which the Secretary General of the Prime Minister’s Office, Prof Seraphin Magloire, issued at nightfall yesterday, announced an increase in the price of fuel, which goes into effect today.

The same release, in what observers were quick to qualify as throwing dust in the eyes of the public, announced an increase of 5.2 percent in the salaries of civil servants.

According to the Prof Fouda-signed announcement, the pump price of petrol, as from today February 1, stands at 730 FCFA per litre. This shows an increase of 100 FCFA. The new pump price of gas oil beginning today is 720 FCFA per litre, up from 575 FCFA. Yesterday’s announcement means there has been in increase of 145 FCFA per litre in the price of gas oil.

The decision, the scribe at the Prime Minister’s Office wrote in yesterday’s release, were on the instructions of the Head of State, President Paul Biya. He further informed the citizenry of what government considers as measures taken to sustain the purchasing power of consumers. Among them, the release talked of the prices of kerosene staying at 350 FCFA per litre, while that of cooking gas was also left unchanged. Companies, the announcement stated, will continue to get fuel from the Cameroon Petroleum Depot Company, SCDP, at 560.19 FCFA per litre.

Proposes minimum wage increase

Another announcement, which, going by government is also palliative, is a proposal for raising the minimum wage from 36,270 FCFA to 41,875 FCFA. The release notes that discussions will progress in the days ahead with key stakeholders, to seek common ground on this path. 

Calls for calm

Yesterday’s release also saw government, through the Star Building scribe, appealing for calm. Prof Fouda noted that, the government is counting on the understanding of citizens and economic operators for the smooth implementation of the new pump prices.

He also talked of government going to dialogue with other actors in the country’s economy and consumer rights groups. The dialogue, the Secretary General at the Prime Minister’s Office noted, will help in forming a synergy to best handle the external shocks at the root of the fuel price increase.

Biya’s silent confirmation of fuel price increase

President Paul Biya had, in his December 31, 2022 end-of-year message to compatriots, stated what many say yesterday’s release just came to confirm.

Biya, then, said the country spent a little over 700 billion FCFA to subsidise fuel and over 75 billion FCFA to maintain the price of cooking gas.

The President, then, talked of the “the intensity of the exogenous shocks and their impact on our economy,” before telling “the Government to consider all options to stabilise prices at their current level, and to maintain the purchasing power of consumers”.

President Biya’s message, which sounded as though he was preparing the minds of citizens about the prices that go into effect today, surfaced later on in the course of that speech.

He was clear that: “However, it is becoming increasingly clear that Cameroon, like many other countries in Africa and elsewhere, will not be able to indefinitely avert a petroleum products price adjustment if we must preserve our fiscal balances and successfully continue implementing  our development policy”.

Gymnastics of price increases

In the simplest of economic terms, analysts say, the 5.2 percent increase in the salaries of civil servants does not match the 100 FCFA and 145 FCFA increase in the prices of petrol and gas oil announced yesterday respectively.

Critics say removing the fuel subsidy, without a commensurate increase in the purchasing power of consumers to match up to the least 700 billion FCFA spent for that purpose in 2022, is simply outsmarting the common man. The worst, they say, is for those in the private sector who will not have such minimal adjustments.

Gov’t succumbs to IMF pressure

The International Monetary Fund, IMF, had in the last few years been on government’s throat for such adjustments. On Monday, the Bretton Woods institution issued a release detailing discussions it had with government authorities (in person) spanning January 5-18 and virtually January 19-27.

Cemile Sancak, IMF Mission head for Cameroon, headed that delegation.

Monday’s release from the IMF indicated that, its officials and Cameroonian authorities had, in tandem with the reality that will begin befalling citizens at  pump stations today, “…recognised the need to reduce the costly fuel subsidies, which are unsustainable under the current international oil price projections and are poorly targeted to those in need and crowd out priority spending”.

Fuel subsidies more than investments in health, agriculture, energy, water…

The IMF also noted Monday that: “For example, the fuel subsidies represent six times the budget allocated to agriculture, four times that to health, and over three times that to energy and water”.

Reforms in fuel subsidy, it noted, “would need to be accompanied by measures to mitigate the impact on the most vulnerable, including cash transfers”.

While in Cameroon last month, the IMF delegation had held talks with the Prime Minister, Head of Government, Chief Dr Joseph Dion Ngute; the Minister of State, Secretary General at the Presidency of the Republic, Ferdinand Ngoh Ngoh; Minister of Finance, Louis Paul Motaze; Minister of the Economy, Planning and Regional Development, Alamine Ousmane Mey and Cameroon Director of the Bank of Central African States, BEAC, Emmanuel Nkoa Ayissi.