The president of the Industrial Association of Angola (AIA), José Severino, advocated on Tuesday (15) for a gradual increase in fuel prices and higher import taxes on gasoline-powered vehicles to mitigate “crazy subsidies,” while also calling for better organization of public transportation, Lusa reported.
“There is a way to mitigate the cost of the gasoline subsidy: the import tax on gasoline-powered vehicles should already be higher, but for that to happen, we need to have organized public transportation; the road tax should also be a little higher,” said José Severino, when asked by Lusa about the new fuel price hike in the country.
According to the AIA president, these measures should mitigate the “crazy subsidy” [that the Angolan government] pays for gasoline and thereby lead to “restraint in the use” of this fuel, while advocating for “functional public transportation.”
Public transportation, especially in Luanda, he argued, is a challenge that must be taken “more seriously by the authorities,” noting that without an adjusted gasoline price, Angola will not achieve the desired level of health and education.
“Unless we adjust the price of gasoline, we won’t have a healthcare system or an education system that meets our standards. We’re spending money on gasoline, and those who drive gasoline-powered cars can afford to pay a little more—and that’s what we need to do (…) gradual increases,” the official noted.
The price of a liter of diesel rose to 420 kwanzas (0.39 euros) as of Saturday (the 13th), up from the previous 400 kwanzas (0.37 euros), but authorities kept the price of a liter of gasoline unchanged at 300 kwanzas (0.28 euros).
In April of this year, the Angolan government announced that the country’s revenues are expected to increase by 2.9 billion euros due to the rise in the price of oil on the international market; however, part of this amount will be used to fund fuel subsidies
On the sidelines of the first edition of “Pensar Global: Debate ‘Africa and the World – Rethinking the Present and Redefining the Future,’” held this Monday in Luanda, José Severino considered the diesel price increase natural, noting, however, that the decision “will not correct the country’s cost structure.”
“This is not what will create dynamism; we must realize that [fuel] price increases must be gradual, just as other countries do,” he emphasized, lamenting the measure’s implications, particularly for public transportation.
Because “public transportation isn’t organized for the middle class, for workers, and for lower-paid civil servants, but the middle class doesn’t find buses comfortable,” he noted, referring to the impact of fuel costs in this sector.
The issue of urban public transportation has been a critical problem in Angola, particularly in major cities, as acknowledged by both authorities and citizens, with private public transportation and motorcycle taxis emerging as alternatives for the vast majority of the population.
The president of the AIA even insisted on the need for “better organization” in the country’s public transportation sector, which, in his view, requires opening it up to the private sector. He advocated for more private investment in the public transportation market: “because the middle class can afford to pay more; currently, it is not possible to have differentiated fares on buses,” he noted.
Severino also admitted that the new fuel price hike is likely to impact the prices of basic food basket items.
The Angolan government is pursuing a policy of gradually phasing out fuel subsidies due to the high drain on the state budget, arguing that these funds could be redirected toward social and infrastructure projects.
In April of this year, the Angolan government announced that the country’s revenues are expected to grow by 2.9 billion euros due to the rise in the price of a barrel of oil on the international market; however, part of this amount will be consumed by fuel subsidies.
