Angola: Fuel prices rise to cut subsidies

ANGOLA had increased fuel prices by 25 percent to reduce subsidies and boost the fiscus, the finance ministry said this week. The price of a litre of petrol would rise to 75 kwanza (R8.58), while diesel would rise to 50 kwanza. “When these fixed prices are adjusted, the government creates fiscal space by reducing subsidies, allowing for other spending on social and economic sectors,” the ministry said. Fuel increases were the latest indication that Angola’s budget was feeling the strain from disappointing oil output this year, Jacques Nel at NKC Independent Economists said. “While an increase in fuel prices will have inflationary effects…, spending directed towards projects with medium-term gains should benefit the economy,” Nel said. – Reuters