Oil Report

UPDATE 1-Tunisia hikes fuel prices in fifth rise this year

(Adds details and background)

TUNIS, Nov 23 (Reuters) - Tunisia raised fuel prices for the fifth time this year, the energy ministry said on Wednesday as part of a plan to reduce energy subsidies, a policy change wanted by the country’s international lenders.

The new decision raises the total hike in fuel prices this year to about 20%.

The gasoline price will be raised on Tuesday to 2.525 dinars ($0.781) per litre from 2.400 dinars, the ministry said in a statement.

Tunisia expects its budget deficit will expand to $3.04 billion in 2022, up from a previously expected $2.63 billion, due to the stronger dollar and a sharp increase in grain and energy prices.

The North African country in October reached a staff-level agreement with the International Monetary Fund on a new financing program.

In return, Tunisia has pledged unpopular reforms, including cutting energy and food subsidies, restructuring bankrupt public companies and controlling the wage bill.

The energy ministry said in statement the increase aims to cover the needs of the local market on a regular basis and to avoid any disturbances in supply.

Last month, many petrol stations in the country were empty for more than a week, which caused long queues for vehicles in what critics of the government see as another sign of an unfolding crisis in public finances. ($1 = 3.2298 Tunisian dinars) (Reporting by Tarek Amara; Editing by Chris Reese)