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Tuesday 28 September 2021
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Tunisia: increase in fuel prices soon?

After the events of the Revolution, the oil sector has experienced some disruption due mainly to social movements. This had negative impact on the progress of the sector and, therefore, the projected revenues.

According to official figures of the Ministry of Industry, consumption of diesel fell 19% due to slowdown of economic activity, against an increase of 12% of gasoline’s in the first seven months of the past year. This decrease was due to repeated strikes and work days lost and major projects for exploration and drilling of hydrocarbons.

Note here that only six explorations out of fourteen and four construction of wells out of fourteen have been completed.

Future increase in gasoline prices?

According to statements made by the DG of Energy at the Ministry of Industry, the state subsidizes fuel to the level of 2.3 billion dinars per year (1.15 billion Euros) and would review the selling price in relation to the rising price of barrel to more than one hundred dollars now.

The use of the conditional in the statement made at a news conference, however, makes of the increase in gasoline prices, only a hypothesis.

Yet, will the government of Caïd Essebssi have the courage to follow the recommendation of the DG of Energy?

Fuel prices in our country are determined by the State for all petrol stations. Per liter, gasoline costs 1.370 dinars (0.7 Euros) while diesel costs 1.010 dinar (0.51 Euros) per liter.

In southern governorates, gasoline consumption has increased 15 times during the month of July.

Indeed, the difficult conditions of the hydrocarbon market emerged in recent days in southern Tunisia which experienced an acute shortage fuel due to a strike in a refinery and the influx of Libyan refugees wishing to return home for Ramadan.

Note that some 70,000 Libyan refugees have been living in Tunisia since the start of the uprising against Muammar Gaddafi last February.

Italy concerned about the safety of Transmed.

The side effects of the Revolution have even hit cooperation between Tunisia and a number of countries in the field of energy. After the social movement that has long disrupted the functioning of British Gas, the largest investor in energy in Tunisia, and its gas production unit, “Italy is concerned about its gas supply.

The CEO of Italian oil giant ENI has just visited Tunisia following an attempted attack against the gas pipeline carrying Algerian gas to Sicily, “wrote “The Tribune” in its online edition of August 9.

Energy cooperation between Tunisia and Italy is however well on track. The recent visit of Paolo Scaroni to Tunis proved it, as it allowed the Italian giant and the Tunisian Government to further strengthen their cooperation on new production activities in Tunisia.

The ENI group plans the construction of a pipeline to transport energy extracted from wells in the region of Gabes in the south of the country.

Spain also represents a quite large partner to Tunisia. In July 2011, memoranda of understanding on granting of three possible hydrocarbon prospecting permits called “Ras Koran,” “Ras Rihane” and “Nadhour” were signed in favor of the Tunisian Oil Activities Company (ETAP) and the Spanish company “Repsol Exploration S.A.”

According to the Ministry of Industry and Technology, these permits cover the respective areas of 6,496 km2, 4,580 km2 and 4,044 km, located in northern marine areas of Tunisia.

Work program of the two-year validity period for the three permits involves the realization of 1000 km of 2D seismic acquisition with a total investment estimated at U.S. $ 3.8 million for each permit (about 5.2 MDT).

At the end of the two years of validity of the exploration permits, The Spanish Company can transform these permits into drilling permits for an investment estimated at sixteen million U.S. dollars or about 22 MTD for each permit.

Tunisia has very modest oil resources which it tries to maximize in order to reduce spending related to hydrocarbons subsidy. It produces 91,380 barrels of oil per year.

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