Angola to further cut fuel subsidies in 2015 on low oil prices, says President Jose Eduardo dos Santos

Jose Eduardo dos Santos, Angola’s President

Angola, Africa largest oil producer behind Nigeria, plans to keep decreasing fuel subsidies next year after it raised gasoline and diesel prices by 20 percent last week, President Jose Eduardo dos Santos said.

“2015 will be economically difficult because of significantly low oil prices,” Dos Santos said in his year-end address in the capital, Luanda. “Some public expenditures will be reduced and some projects postponed,” he said. “For example, subsidies for fuel prices.”

Oil futures fell 44 percent this year, set for the biggest annual drop since 2008, as the Organization of Petroleum Exporting Countries resisted supply cuts to defend market share in response to the highest U.S. output in three decades. Angola’s government relies on oil for more than three quarters of its revenue, and falling prices prompted the southwest African country to scale back investment plans.

Angola raised the price of gasoline to 90 kwanzas ($0.88) a liter last week from 75 kwanzas, the Finance Ministry said in a statement. Diesel climbed to 60 kwanzas per liter from 50 kwanzas.

“Tougher state-budget controls and financial discipline will have to be enforced to keep stability,” Dos Santos said.

Source: Bloomberg – Business, Financial & Economic News, Stock Quotes.