Angola has just put an end to the gasoline subsidy, which has provoked quite a variety of reactions in neighboring countries. This decision comes after the liberalization of the price of gasoline in 2021 and follows a difficult economic situation due in particular to the fall in oil prices in 2014-2015. State expenditure related to fuel subsidies was, in 2022, around 3.8 billion dollars. Gasoline therefore goes from 0.49 to 0.87 USD, which will have the effect of limiting fraud and smuggling to neighboring countries.
If this measure does not delight motorists, it will allow the funds saved to be allocated to the country’s social policies, such as housing and social security. It is a realistic economic choice, which puts an end to a debonair and previous practice, which had led Angola to be the fourth country in the world where gasoline was the cheapest.
However, it should be noted that there are concerns about the impact this subsidy would have on farmers, fishermen and taxi drivers, for whom the effects of rising petrol prices would be most heavy. For this category of the population, a mitigation measure is planned to guarantee their survival and financial stability.
This situation has caused a reaction from several neighboring countries, which are delighted with the end of this practice, as it will limit fraud and non-taxable competitive products. It should be noted that this practice is seen in several African oil-producing countries, including Nigeria, which also recently ended the subsidy, Ghana, Kenya and the DRC.
This measure should allow Angola to recover economically and better control its oil production, thus providing financial and economic stability to its citizens.