The likely upward revision of prices of commodities including petroleum products is a perfect illustration of the bad news that governments, all without exception, sweep as long as possible under the carpet, although, very often the hidden object extends out and turns plain as the nose on the face. From this point of view the Tunisian authorities have not departed from the rule.
Ridha Bouzouada, Director General of Energy at the Ministry of Energy, Mining and Renewable Energy spoke up on Tuesday, October 18, 2016 to TAP, denying – but not categorically – rumors about an increase in prices of unleaded fuel, regular diesel and diesel 50. He has done the job, stating that no such thing is in the good books of the government. Except that in the meantime, he added, that an upward or downward adjustment of prices at the pump is already rigged for mid-January 2017. This means, in less diplomatic language, that prices are likely to be revised upwards in view of the current market trend…
Adjusting prices at the pump to international oil prices, it is also that. Yet, what is the picture now? Oil barrel prices have regained color yesterday; they even reached a historic high since last year. Oil prices crossed the $ 50 threshold, more precisely 51.60 in New York and 52.67 in London. Therefore, Tunisian motorists need to worry after having barely started since July 2016 – to enjoy the benefits of the mechanism of adjusting prices to international prices, and yet at very
reasonable levels, or even insignificant, after years of “racketeering”, a Tunisian specificity.
Indeed, citizens said gladly: “Our country is one of the few in the world where the price of fuel goes up, up, never down.”
The government, of course, cannot take such a stance, with all the resistance already sparked by the Finance Bill 2017, which decidedly does not please anyone! (neither the UGTT, nor the employers nor the lawyers …).
If in addition we throw in public an increase in fuel prices, the consternation could turn into an explosive cocktail. But the fact is that the rise in prices at the pump hangs in our faces because there was this: The unexpected melting in US stocks. This almost immediately caused a fever in international crude prices. One thing is certain: All the ingredients are there for a next rise in international prices, especially if Petroleum Exporting Countries (OPEC) meet their commitments made at the Algiers meeting on September 28 to reduce oil production.
Bad news: The local production of crude oil will drop
Note that the state budget for 2017 was prepared on the basis of an average oil price of 50 dollars per barrel and an exchange rate dinar / dollar of 1 dollar = 2.250 dinar.
Therefore, from that perspective, the forecasts of the Tunisian government are quite in line with the current prices. But if international prices were to rise substantially, under what was just said, there will be case sensitive. First, in the
public coffers. Then among consumers due to the adjustment of prices at the pump to international crude prices. So the government would take in the pockets of motorists what it would have paid more to import oil. This is Logical, you would say.
Another factor that impacts the price directly is local production of crude oil. It is valued at 2.203 million tons next year against 2.225 million tons expected in 2016. In that case, we could end up with a volume of imports of petroleum products 2.812 million tons. And since, as provided in budget 2017, indexation of domestic prices on international prices was maintained in 2017, fatally motorists could pay more for their fuel next year. You have been warned…
