Could fuel price rises damage Tunisia's fragile political landscape?

Could fuel price rises damage Tunisia's fragile political landscape?
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Published March 10th, 2013 - 11:04 GMT via

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Tunisians face petrol price hike
Tunisians face petrol price hike
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Tunisians are outraged by the latest increase in fuel prices, which some suggest could also imperil the country's fragile political environment.

Higher petrol prices went into effect Tuesday (March 5th), the industry ministry announced. However, gas cylinders for domestic use and lighting fuel prices would remain unchanged.

Finance Minister Elyes Fakhfakh said the price increase would reduce the cost of subsidies in the 2013 budget by 500 million dinars (242 million euros) to 4.2 billion dinars (2 billion euros).

A year ago, Tunisia started a campaign to reduce subsidies in the framework of an agreement struck with the International Monetary Fund (IMF) for a loan worth 1.37 billion euros.

Since March 1st, the government started deducting one per cent from salaries above 1700 dinars (824 euros) to help fund subsidies.

"The regulation of fuel prices is a major problem because it contributes to inflation, which Tunisia is already suffering from, at a rate of 6 per cent," said economist Ezzedine Saidane.

"If we exclude subsidised goods, real inflation ranges between 10 and 11 per cent," he added.

Since "fuel prices are part of the cost of production, whether goods or services", Saidane said he expects to see an increase in the prices of most consumable goods.

"This increase will have an impact on Tunisian exports," he predicted.

Economic and financial expert Moez Joudi said: "The series of price increases will continue and the power of the consumer will deteriorate further."

"The country needs foreign loans from the IMF but cannot obtain them unless certain painful conditions for the citizen are met," Joudi added. "These conditions include the removal of subsidies and perhaps the reduction of the salaries of civil servants. Price increases will continue and will even affect bread and other subsidised goods."

He cautioned, "Political data is not reassuring yet we continue with the same political approach, the same ministers and continued poor governance, inefficiency and lack of clarity of vision."

On the Tunisian street, many citizens are apprehensive of the anticipated increase in fuel prices.

"It is the second increase in fuel prices in a non-oil producing country within few months," Mokhtar Jlidi, 55, told Magharebia. "This is a very bad indicator, not counting what this could entail in terms of increases in prices of goods and other vital services."

Moufida Saidi said that "the income of Tunisians has not risen and remains the same while prices are witnessing a scary escalation."

"We did not believe that the revolution and the change would have such a high price," commented Lobna Belkassem, 33.

The Tunisian Consumer Defence Organisation (ODC) is organising a protest against higher fuel prices on March 15th outside the Constituent Assembly headquarters.

© Magharebia. All rights reserved.

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