Tunisia raises petrol prices to trim budget gap
TUNIS, March 5
TUNIS, March 5 (Reuters) - Petrol prices rose 6.8 percent in Tunisia on Tuesday after the government cut fuel subsidies to help reduce a forecast budget deficit of 6 percent of Gross Domestic Product this year.
The government raised the price of petrol to 1.570 dinars ($0.99) a litre from 1.470, the second increase in six months.
Finance Minister Elyess Fakhfakh said the price rise would reduce the cost of subsidies in the 2013 budget by 500 million dinars to 4.2 billion dinars from 4.7 billion last year.
Tunisia's subsidy cuts are part of a deal with the International Monetary Fund for a $1.78 billion loan.
This month the Islamist-led government began deducting one percent of salaries above 1,700 dinars per month to help fund subsidies.
A wave of unrest shook Tunisia last month after the Feb. 6 assassination of secular politician Chokri Belaid by what the authorities say was a group of Salafi Islamist militants.
Talks are under way on a new government to replace one led by Hamadi Jebali, who responded to Belaid's killing by proposing a technocrat cabinet to prepare for elections. He resigned after his own Islamist Ennahda party rejected his plan.
Prime Minister-designate Ali Larayedh, also from Ennahda, is expected to announce a new coalition cabinet shortly.
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