Cameroon plans 94.2% reduction in fuel price subsidies in 2025
By Synthia Lateu
Cameroon’s draft finance law for the 2025 fiscal year proposes a significant 94.2% reduction in fuel price subsidies, decreasing from 263 billion FCFA in 2024 to just 15 billion FCFA in 2025. This move aligns with recommendations from the International Monetary Fund (IMF), which has urged the country to eliminate fuel subsidies.
The IMF advocates for improved budget management and a reallocation of resources toward critical sectors like infrastructure and social programs. Cémile Sancak, the IMF Head of Delegation to Cameroon, highlighted the necessity of this reduction during a review mission in October 2024. She stated, “The total cessation of subsidies is imperative to enable financing for other sectors.”
The adjustment in fuel prices has been evident, with retail fuel and diesel prices rising by 33.3% and 44.0% respectively from January 2023 to February 2024. These increases have followed a reduction in subsidies, which dropped from 1,000 billion FCFA in 2022 to 640 billion FCFA in 2023. This trend is expected to continue into 2025 amidst ongoing inflationary pressures.
Fuel Price increase in February 2024
As of February 2024, the price of Super fuel rose to 840 CFAF per litre, up from 730 CFAF in 2023. This marks an increase of 110 CFAF, representing a 15% rise. Similarly, the price of Diesel increased to 828 CFAF per litre from 720 CFAF in 2023, reflecting a spike of 108 CFAF per litre, also a 15% increase.
In contrast, the prices of kerosene and cooking gas remained unchanged, at 350 CFAF per litre and 6,500 CFAF for a 12.5-kilogram bottle, respectively
Impact on Households
Rising fuel prices in Cameroon significantly impact food security by increasing transport costs and inflation rates, according to the World Food Programme’s 2024 report. This situation challenges the environment for the average Cameroonian, leading to economic instability in the country. In February 2023, a fuel price hike occurred just before the agricultural season, coinciding with the low availability of local commodities due to earlier harvests. This led to a temporary spike in prices for some agricultural products between February and April. The inflation rate reached 7.4% in 2023, driven by an 11.1% rise in food prices and a 15% increase in transport costs. Contributing factors included low agricultural production, supply challenges, and rising raw material costs.
The trend continued in 2024 despite a downward movement in the inflation rate to 4. 9% in the first nine months. This increase according to the National Institute of Statistics (INS) is mainly due to a 6.2% increase in food prices and a 13.4% increase in transport costs, due to the adjustment of fuel prices at the pump in early 2024.
