HISTORIC DECISION FOR OIL PRICES IN MADAGASCAR
Africa’s Young President negotiates lower oil prices in Madagascar.
President Andry Rajoelina discusses with oil industry representatives to lower the market price of petroleum products. These discussion border around the need for a more affordable price that will be favourable for the economy. The Malagasy household depend on petroleum products for electricity, and transporting commodities.
Despite local exploration activities, the country imports to sustain its nearly 25 million people. The lack of affordable product hampers on economic activities, seeing that more than 70 percent of the population live below the poverty line. More so, the country relies heavily on fuel oil for electricity generation which is an important criteria for development.
Subsidising the price of petroleum products had been a practise in 2009, but that became unsustainable for government. So in 2015, government requested the technical assistance of World Bank’s Energy Sector Management Assistance Program (ESMAP) to support in sustainably eliminating fuel price subsidies(1). The outcome of this technical assistance is evident in a tweet by President Andry;
“We have made historic decisions for Malagasy households:
✅ 500 Ar in – on the price of kerosene ($0.14)
✅ 150 Ar in – on the price of diesel ($0.04)
100 Ar in – on the price of gas ($0.03)
➡️ prices will apply from tomorrow regardless of the fluctuations in the price of a barrel.”
Nous avons pris des décisions historiques pour les ménages Malagasy :
✅500 Ar en – sur le prix du pétrole lampant
✅150 Ar en – sur le prix du gasoil
✅100 Ar en – sur le prix de l’essence
➡️prix applicables dès demain quelques soient les fluctuations du prix du baril. pic.twitter.com/RJl2wr7uqV— Andry Rajoelina (@SE_Rajoelina) June 19, 2019