oil and gas

Fuel: massive increase and cap, where state fills pockets on the back of all!

November 25, 2022

It is now the 5th increase in fuel prices in a single year. An increase, made on the sly as the time of Bourguiba and Ben Ali. And after the decision to set the rate of automatic adjustment, monthly, according to the decision of the Ministry of Energy of November 23, 2022, it is easy to imagine that this increase should be followed by another in December, and that the price of a liter of gasoline would end the year 2022 at more than TND 3.1.

Afif Mabrouki, adviser to the Ministry of Industry, Mines and Energy, confirmed on a local radio that “the new increase is part of the monthly adjustment specified by 5% in the joint decision, which, in turn, has been amended and set at 7% as the upper limit.

What the Ministry of Energy does not say

Mabrouki also said that “the process of raising prices aims to achieve the minimum general balance of the budget and social conditions, and that fuel remains subsidized in Tunisia and does not reach true prices.”

The adviser of the Minister Gounji forgot to indicate, however, that the coffers of the state were also filled up in the process, without the taxpayer seeing the effects on investment, the creation of value to be redistributed and new jobs to be provided for the 15% of unemployed. Last August, the investment expenditure of the State (2.258 billion DT) represented only 9% of all resources (TND 25.01 billion).

And as illustrated by our photo above and our table below, from official documents of the Ministry of Energy, the duties and taxes collected by the treasury is 34% of the pump price of gasoline, 18% for a liter of heavy diesel and 26% for diesel S.S. The state is thus taking out from consumers’ pockets 0.785 DT per liter, far from the margin of petrol stations (between 8 and 9%) that everyone generally accuses of raising prices.

By simple calculation, and based on the prices of last August of only gasoline for a consumption of 553 Ktep (Thousand tons of oil equivalent), we realize that the state absorbs more than TND 550 million, and it will be necessary to add the taxes on the rest of the fuels which the state has a monopoly.

What Afif Mabrouki forgets

This official, from the Ministry of Energy, which does everything or almost in secret and avoids the press that digs into the files, fails to say is that this new increase will be massive, in the sense that it will impact not only the motorist.

But also all those who make of transport their business, at rates set by the state, such as truckers and taxis, as well. They will be obliged to pass on this increase in their rates to preserve their financial and social balance. They will certainly ask the authorities concerned.

The latter will procrastinate, and they will strike and it is still the citizen, whose purchasing power will also be impacted, who will pay the price. A purchasing power that will be hit hard by inflation that will not fail to rise in turn.

In October 2022, the prices of the group “housing, water, gas, electricity” had already risen by 0.7%. It is expected to be even higher due to the 5th increase in fuel prices. In October 2022, the inflation rate was 9.2 percent, after being 9.1 percent in the previous month. The core inflation rate (excluding food and energy) went up to 7.4% after 7.3% in the previous month. With the latter expected to be impacted by rising fuel prices, the inflation rate will also rise, further eroding purchasing power.

On the private radio where he spoke on Thursday, November 24, 2022, Mabrouki who is a senior manager with a corporate car and its gasoline vouchers, forgot to specify that the increase in fuel prices is a cost of production that also rises for a processing industry as in Tunisia. And as a result, it will be the prices of manufactured goods that will increase. Over a year, the prices of manufactured goods had already risen by 9.6% due to the increase in prices of building materials of 10.3%, clothing items of 9.7% and products for routine household maintenance of 9.4%.

And if … But we do not remake the world with if!

For services, the price increase by 6.2% over one year is explained by the rise in prices of services in restaurants, cafes and hotels by 9.6%, the latter being impacted by the increase in prices of electricity and gas in particular.

And if the Minister of Taxation, Sihem Nemsia decided, as we doubt very much, to reduce its income in taxes and fuel taxes, implemented a plan for energy efficiency in the administration, adopted a management mode like a “good father” of public funds, and otherwise fund the gap of its budget, why not by the IMF loan? Wouldn’t this be the right way to preserve and relieve the purchasing power of her fellow citizens, and a kind of good subsidy for the country’s growth?


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