TUNIS, Tunisia — The Tunisian government decided March 30 to increase fuel prices in an effort to reduce the budget deficit and meet harsh economic reforms requested by international lenders.
The country’s Ministry of Industry and Small- and Medium-Sized Enterprises issued a statement announcing that unleaded gasoline prices will increase by 0.08 dinar ($0.027), putting the price of one liter at 2.065 dinars, which is equivalent to $0.68. The new price of one liter of diesel fuel stands at 1.57 dinars ($0.58), an increase of 0.09 dinar ($0.030).
According to the statement, the Ministry of Industry justified this new price hike — the sixth of its kind since 2017 — with the continuous rise in oil prices and derivatives globally, as the price of crude oil exceeded the threshold of $68 a barrel in late 2018.
In this context, Tunisian farmers held a protest April 10 before parliament and another before the Ministry of Agriculture to demand an increase in the prices of agricultural products such as cereals, milk, poultry, tomatoes and potatoes. The protest, which was called for April 6 by the Tunisian Union of Agriculture and Fishing (UTAP), also called for alleviating fuel price increase repercussions on the capabilities and potential of farmers.
This decision sparked a wave of anger among Tunisians, prompting some car owners truckers to block roads across the country’s main governorates.
Tunisian Ministry of Interior Spokesman Sufian al-Zaaq said in a statement to IFM radio April 2 that car owners and truckers have closed five major roads in different governorates in peaceful protests against the new price hikes, and security forces are following up on the situation.
The last time the Tunisian government raised fuel prices was in September 2018 in a bid to curb the budget deficit and cut it to around 3.9% of the 2019 gross domestic product, which stood at 4.9% in the past year.
Other Tunisian citizens also took to social media to express their anger and condemnation of the new gas prices, calling for street protests until the government reverses its decision.
Activist and lawyer Khaled Awainia called in a Facebook post on April 3 for car owners and truckers to park their vehicles at the entrances of the cities and block the roads and cause paralysis to the entire country until the decision is reversed.
Another activist, Mohamed Ferjani, said April 1 in a more sarcastic post on his Facebook page that Tunisians ought to “ditch their cars and get bicycles instead” given the new soaring prices.
Tunisia’s powerful labor union, known as the Tunisian General Labor Union, issued a statement April 2 urging the Tunisian government to rescind the decision, accusing it of deepening the citizens’ economic burdens and stressing that this increase reflects the government’s failed economic and financial policies for which Tunisians are paying the price.
In an April 1 statement to private radio station Shems FM, Chairman of the Finance Committee in parliament Monji Rahwi considered that the new gas prices will harm economic and agricultural institutions as they will cause an increase in the prices of services and products.
“This increase is the sixth of its kind in a year and a half. These repeated price increases will inevitably affect the purchasing power of Tunisians,” Ezzeddin Saidan, an economics professor at Tunis University, told Al-Monitor.
Saidan said economic institutions will be forced to raise the cost of production to offset the price hikes, which would adversely affect the ability of institutions and individuals to save. Saidan said this decision will not contribute to reducing the budget deficit but will increase its financial burdens since it will lead to more social demands and exacerbate the already tense situation in the country.
Commenting on the government's new decision, Prime Minister Youssef Chahed said during the opening of the 8th session of the Arab-Chinese Businessmen Conference held in Tunis April 2 that the government had to take these measures as the country has been going through a difficult period. Chahed said the price increases were provided for in the Tunisian Finance Law of 2019.
Secretary-General of UTAP Quraish Belghith told Al-Monitor the government’s decision came without warning, stressing that it will harm the summer agricultural season and cause price increases in all basic materials whose production requires large amounts of fuel.
The Tunisian Confederation of Industry, Trade and Handicrafts — a trade union organization concerned with defending businessmen and owners of free economic institutions — warned in a statement April 1 against the catastrophic consequences of such successive and arbitrary price increases on the local industrial fabric and several occupations and trades. The statement added that these measures have dangerous repercussions on the competitiveness between and sustainability of economic institutions and on the industrial sector as a whole.
The confederation also stressed that this government step will hinder the national economy and disrupt development at the level of the country’s governorates, which successive governments have been seeking to establish. The statement called for halting these obscene price hikes and freezing any decision to increase prices in 2019.
Meanwhile, Salim Basbas — a member of the Tunisian parliament’s Finance, Planning and Development Committee and a leader of the Ennahda party, which is part of the ruling power — told Al-Monitor that the government seeks to safeguard the financial balances set as per the 2019 budget and set a limit to the state’s fuel subsidiaries.
Basbas said the rise in international oil prices has caused an imbalance in the budget, which prompted the government to increase gas prices in a bid to counterbalance this gap.
Yassin Bin Ismail, a professor in financial engineering at Tunis University, told Al-Monitor the government’s decision is arbitrary and ill-considered as it was not run by economists and experts, which could cause a social crisis — especially since it directly affects citizens’ purchasing power.
Ismail explained that the price increase will help the government reduce the budget deficit, especially since it had previously approved wage increases in the public sector. The government has also to respond to the conditions of the International Monetary Fund (IMF) to cut public expenditures and implement harsh economic reforms to be eligible for the fourth tranche of the IMF $2.98 billion loan, which was approved for Tunisia but has yet to be disbursed.
Of note, the Independent High Authority for Elections decided March 29 to postpone the presidential elections that were slated for Nov. 10 until Nov. 17. This came in response to the demands of protesters calling for the postponement of election day as it coincides with the birthday of the prophet.
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