Cameroon scraps planned fuel subsidy cut

By Tansa Musa

YAOUNDE (Reuters) – Cameroon has decided to keep subsidies on fuel through 2012 in an effort to help ordinary citizens, a state-run agency said on Thursday, ditching a plan to slash the costly programme.

The decision follows protests and strikes in neighbouring Nigeria that forced the government there to roll back a huge fuel price hike, which was intended to divert public funds toward infrastructure and social programmes.

“The fuel price subsidies will continue through 2012, and the search for solutions aimed at reducing these subsidies will continue,” Cameroon’s state-run Hydrocarbons Prices Stabilization Fund (CSPH) said in a statement.

It added the government was “concerned about protecting the purchasing power of the population”.

Cameroon’s government in December proposed a cut to the subsidy programme, which the World Bank estimated had cost some $650 million in 2011, or 14 percent of the overall government budget.

Cameroon introduced the subsidy in 2008 following deadly riots over increasing food and fuel prices.

“You are certainly aware of what happened here in 2008 and the recent incidents in neighbouring Nigeria after the government suspended fuel subsidies,” a finance ministry official told Reuters on condition of anonymity.

“I don’t think any minister will seek the wrath of the president of the republic by proposing (a subsidy cut). It is not even on the talking table,” he said.   Continues…..

REUTERS

 

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