YAOUNDE, July 1 Cameroon has cut some of its
costly fuel subsidies, a move that will please international
donors calling for reforms but has in the past been reversed due
to the threat of protests against subsequent price rise.
Cameroon has for decades pumped oil and is a significant
cocoa producer but analysts say the country's potential has been
stymied by a lack of reform and political stagnation under
President Paul Biya, who has been in power since 1982.
The price of petrol and diesel on Tuesday rose by 14 and 15
percent, respectively, while a bottle of gas was up just over 8
percent, a government statement issued late on Monday said.
The International Monetary Fund has for years called for
subsidies, which cost around $600 million a year, to be cut.
But recalling deadly protests over fuel prices in 2008 and
neighbouring Nigeria's failed bid to cut similar subsidies in
2012, Cameroon has repeatedly stalled the move.
The price of petrol at the pumps is now 650 CFA francs
($1.36) per litre and diesel prices have risen to 600 CFA
francs, according to the statement.
The statement did not say how much the government would save
from the move but said the subsidies cost 157 billion CFA francs
in the first six months of this budget year.
In an effort to ease the impact of the rise in fuel prices,
the government said it will start talks over increasing the
minimum wage, among other measures.
The IMF said in May that Cameroon's overall fiscal deficit
for 2014 was forecast at 5.5 percent of GDP, mainly due to fuel
subsidies and the expansion of a public investment programme.
The deficit was expected to reach 5.7 percent in 2015,
according to the IMF.
"The cost of these subsidies remains elevated and crowds out
other expenditure that could promote more inclusive growth," the
IMF said. "The mission advised the authorities to phase out
these subsidies gradually and to replace them with targeted
($1 = 478.9400 CFA francs)
(Reporting by Anne Mireille Nzouankeu; Writing by David Lewis,
editing by David Evans)