The draft state budget for 2024 earmarks TND 7,086 million for hydrocarbons and electricity subsidy, compared with TND 7,030 million for 2023, an increase of TND 56 million.
This expenditure is divided between the Tunisian Electricity and Gas Company -STEG- (TND 4,019 million) and the Tunisian Company of Refining Industries -STIR- (TND 3,067 million).
According to the draft state budget for 2024 published on the website of the Parliament, expenditure on hydrocarbon and electricity subsidies has risen sharply in the last two years, reaching 5.3% of GDP in 2022 and 4.4% of GDP in 2023 (forecasts), due to the volatility of the exchange rate and oil prices on international markets.
According to the guidelines set out in the 2024 State Budget, the government is working to continue compensating for the cost of hydrocarbons and electricity, while ensuring better control of this expenditure.
This objective should be achieved by implementing mechanisms to control the consumption of hydrocarbons in the public sector and by raising awareness of the need to rationalize the consumption of petroleum products, as well as by fiscal measures aimed at encouraging the use of alternative and clean energies, particularly solar and wind power.
The government will also work to promote private sector electricity generation, especially from renewable energy sources, and to establish a regulatory body to oversee the management of the electricity sector.
Estimates of hydrocarbon and electricity offsets are based on a number of assumptions, including a Brent oil price of around $81 (the Brent price is expected to fluctuate between $80 and $87/barrel in 2024, according to estimates by world organizations), the stability of the dinar against the dollar, a 7% increase in national consumption of oil products and a 3% increase in electricity consumption, as well as the repayment of part of the 220 million dinars owed to the STIR.
The State has also increased the allocation for transport subsidies from TND 640 million to TND 660 million in 2023. These funds will be used to subsidize school and university transport, as well as concessionary and free transport.
The draft state budget for 2024 also provides for a budget of TND 8,359 million for “intervention expenditure”, compared to TND 7,693 million planned for 2023, i.e. an increase of 8.7%. This budget includes TND 353 million for social, economic and cultural interventions, in line with the State’s social role in income distribution and the fight against poverty.
The draft state budget for next year foresees allocations of around TND 11,337 million for subsidy expenditure, compared to TND 11,475 million planned for 2023, i.e. a decrease of 1.2%. The subsidy budget represents 19% of budget expenditure and 6.5% of GDP.
