Angola, Nigeria Wind Down Fuel Subsidies, as Kenyans Brace for VAT Increases on Petrol - Africa’s premier report on the oil, gas and energy landscape.

Angola, Nigeria Wind Down Fuel Subsidies, as Kenyans Brace for VAT Increases on Petrol

By Macson Obojemuinmoin

Angola’s increase in the price of gasoline at its filling stations by 88% is the farthest it has gone, in five years, to move the needle on fuel subsidy reduction.

On June 2, 2023, a litre of gasoline shot up from 160Kwanza to 300Kwanza, an 88% jump.

The government says that measures to mitigate the effect of the price increase will be implemented for some priority sectors and “highly vulnerable classes”. The subsidy (meaning former low prices) will remain for  the agricultural  and fishing sectors, some public companies like the Public Electricity Production Company ( PRODEL) as well as Taxi Drivers, Bus Drivers and goods laden Trucks.

The country has determined that subsidies on petroleum products, valued at close to $3.6Billion in 2022, will go, but it doesn’t want to take off the subsidy in one fell swoop.

The story is different in Nigeria, where gasoline subsidy ended on May 29, 2023,  the day of the coronation of Bola Ahmed Tinubu as the country’s 16th President. Subsidies for other products had long gone. The new gasoline prices, of between 488Naira  in Lagos and 570 Naira in Borno, in the country’s far northeast,  are about 186% higher than the subsidized prices which became extinct on Mr. Tinubu’s inauguration day.

Kenya’s gasoline and diesel prices are deregulated, but President William Ruto is determined that a large increase in taxes is the way to fund the building of critical infrastructure. The Finance Bill submitted in mid May 2023 to Parliament is expected to  double VAT on petroleum products to 16%, pushing up prices of a litre of gasoline by Sh13.51 to Sh196.21, while diesel will increase by Sh12.40 to Sh180.88, at current crude oil prices.

Fuller details are published in the May 2023 edition of the Africa Oil+Gas Report



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