These countries have cut their pump prices in Africa. So why are consumers still unhappy?

Consumers are angry over what they see as profiteering fuel traders. The retailers say price movements are “complex”.

AFRICA’s  largest oil producer Nigeria announced a cut in petrol prices, a month before the country votes in presidential and parliamentary elections.

A litre of petrol will now cost 87 naira (47 US cents) from 97 naira. Oil minister Diezani Alison-Madueke said this took into account the recent volatility in the global oil market.

Depending on whether you are an oil producer or importer in Africa, tumbling oil prices could either harm your economy or give it sorely-needed impetus. 

Nigeria depends on crude exports for 70% of government revenue and some 90% of its foreign exchange earnings.

With the historic fall in oil prices, Jonathan’s administration has had to introduce austerity measures and devalue the naira currency, directly affecting the standard of living for Nigerians.

The country extracts around two million barrels of crude a day but imports most of its fuel as it does not have refining capacity. Subsidies are used to keep prices low at the pumps.

But with crude prices now at under $50, a drop of more than half since last June ($107), other African governments have also cut prices, as they seek to pass on the benefits to businesses and consumers, but mostly under pressure from their constituents and vocal motorists.

They are not happy at all. The main gripe appears to be the magnitude of the cuts, with energy regulators pleading taxes, currency fluctuations and purchasing lags in their defence, while consumers accuse them of being held hostage by cartels.

We take a look at continental trends towards reduction (currency conversions at current dollar rates):


KENYA


The Energy Regulatory Commission (ERC) last week cut prices to an average 93 Shillings ($1.02), from Sh110 ($1.21 at current rates) in October.

Diesel will for the next few weeks sell at Sh83.3 ($0.91), with the ERC indicating it would again lower prices mid-February as cheaper purchases come online.


TANZANIA


The Energy and Water Utility Regulatory Authority (Ewura) has pleaded taxes, arguing that irregardless of global prices, a litre of fuel carries additional costs, with petrol attracting taxes of 878 Tanzanian shillings ($0.5).

However a litre of petrol has fallen to an average Sh1,955 ($1.1) this month, from Sh2,267 ($1.28) in September. 

Diesel is currently selling at Sh1,846, from Sh2,091 in September.


UGANDA


Petrol now retails at an average 3,650 Ugandan shillings ($1.26) for a litre, from about Sh3,760 ($1.30) in October.

Diesel is at Sh3,150. Unlike other neighbours Uganda does not have a regulatory agency, with the free market largely dictating price movements.


RWANDA


Fuel prices in Rwanda have in less than ten months gone from 1,030 Rwandan Francs ($1.49) to the current Rwf895 ($1.29). The Rwanda Utilities Regulatory Authority (RURA) expects further cuts at the end of the month.

RURA also cut public transport fares from Rwf20 per kilometre, to Rwf18 for the same distance, following talks with operators.


ETHIOPIA


The country’s Ministry of Trade in December announced new retail prices of fuel, with a litre of petrol retailing at an average 19.4 birr ($0.96), and 17.49 (0.86) for diesel.

This amounted to cuts petrol prices of 0.44 birr a litre, and 0.38 birr for diesel, for the first time in over a year, sparking shortages.

The Horn of Africa country expected to have last year reduced its oil import bill, which forms a fifth of total imports and has grown by an average 10% every year, by $600 million.


GHANA


Regulator National Petroleum Authority (NPA) cut prices by 10% effective this month, but still came under severe criticism from Ghanaians who expected more. President John Mahama says that citizens of the oil exporting West African country cannot expect to demand more reductions while still hoping for meaningful development.

Petrol now sells for 17 cedis a gallon (4.5 cedis, $1.36 a litre). The NPA says it needs to recoup “losses” from subsidies and clear debts.


SENEGAL


The Senegalese government last month cut fuel prices, with a litre of petrol now at 799 CFA ($1.4), from 889 CFA ($1.57) where it had been pegged for several months. Prices on other items including rice, flour and gas were also cut, as was rent. 


SOUTH AFRICA


Fuel prices were early this month reduced to an average of 11.15 rand ($0.96) a litre in Gauteng. The South African government regulates the retail price of petrol, but is looser with diesel, only setting the wholesale price for retailers. 


MALAWI


The Malawi Energy Regulatory Agency effective January 11 reduced prices to 760.40 kwacha ($1.64), from 856.7 kwacha ($1.84) last year.

Diesel will sell at 758 kwacha. The country has some of the highest prices on the continent, only second after Djibouti in the region, which sells its petrol product at an average of $1.64 a litre. 


ZIMBABWE


Fuel stations have scramble to cut prices at the pump following a government order that gave a January 14 deadline for them to do so, setting a $1.20 level for diesel, and $1.32 for petrol, and threatened unspecified action in the event of non-compliance.

Dealers are however selling at an average of $1.43 for petrol, and $1.33 for diesel, which they say are still competitive. Prices were at an average of $1.49 last year. 

The  southern African country uses the dollar as its currency.

The International Energy Agency (IEA) says a reversal in trend is possible this year, but prices will dip further. Analysts see the long-term look as prices remaining at levels lower than in recent years, but above $50.

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