As a result of the fall in the price of crude oil in the global market, Angola is set to end petrol subsidies and increase the price of other fuels, the country’s finance ministry said on Thursday.
A statement from the ministry said the drop in oil prices has adversely affected the finances of Africa’s second largest crude exporter.
The statement added that the changes would come into effect on September 30.
In February, Angola slashed spending in the 2015 budget, widened its fiscal deficit projections and said it would increase borrowing.
The country imports most of its fuel due to insufficient refining capacity and it spent almost four per cent of its 2013 budget on fuel subsidies, according to the Angola Control Risks.
“Gasoline now joins the free price system, ending the burden on the state of the cost of subsidies.
“The ongoing effort to adopt realistic prices will help strengthen social programmes and reduce inequality, since subsidies benefit the most favoured groups and encourage fuel smuggling to neighbouring countries,” the statement said.
Angola has increased fuel prices in recent months and has saved 110 billion kwanza ($1 billion) from reduced subsidies since October last year, the statement added.
State-run oil company, Sonangol, will now determine the price of petrol, the finance ministry said.
