29-08-04

While the surge in world oil prices has been a godsend for African exporters, it has placed an extra burden on other economies on the world's poorest continent, whose governments have passed on the cost increase to petrol pump users. Exporters such as Gabon, Algeria and mighty Nigeria, which produces the bulk of Africa's crude, have seen profits soar amid record global prices reaching an all-time high of $ 49.40 in trading.

But with the surging prices for raw crude comes an even greater increase in refined petroleum products, which largely leaves Africa on the back foot as it depends almost entirely on imports.

It is a "double-edged sword" for Africa, according to the head of Algeria's agency for external commerce Mohamed Bennini, as industrialized nations are more likely to recoup their costs. Nowhere is the dichotomy more apparent than in Nigeria, which has enjoyed a $ 2.5 bn boost in profits from crude but is likely to pour the bulk of it into its imports of refined oil.

President Olusegun Obasanjo, mindful of mounting costs, has moved to deregulate the oil market -- a decision that has inflamed the population and sparked 14 months of riots and nationwide strikes among citizens vehemently opposed to any change in the fixed prices set by the government.

Gabon has enjoyed an increase in oil revenues but will not release its figures until the end of the year, a finance ministry official said from Libreville, so as to amortise the increase into its budget. That decision has helped Gabon, like neighbour Cameroon as well as the Central African Republic, keep pump prices relatively stable. There has been little movement at the pumps in Burkina Faso, Togo or Ivory Coast, which continues to pump offshore oil despite 23 months of crisis crippling the rest of its agriculture-based economy.

Most other African countries, however, have no choice but to burden their already struggling populations with higher pump prices, which in turn increase costs across the board. In Sierra Leone, mounting costs for crude have added roughly 50 % to the price of a ride in a shared taxi, which is the preferred method of transport around the tiny west African state.

And while current prices for petrol in neighbouring Liberia are nowhere near the $ 30 per gallon levels they reached during its 14 years of war, any increase in the cost of staple goods is deeply-felt by the population, 80 % of whom are unemployed. Not better in other African countries Guinea announced a 66 % hike on prices at the pump on August 13. Mauritania, in the throes of its worst locust invasion in more than a decade that could lead to food shortages in coming months, raised diesel and gasoline prices by 30 % and 41 % respectively for its 2.7 mm people.

Other parts of Africa are faring no better under the rising price of crude, which firmed somewhat after a five-session drop to $ 43.18 a barrel by the close of trade in New York.

Madagascar has seen prices on petroleum products climb by 41 % since January, while in Ethiopia and restive Burundi, residents are also paying more at the pump.

Even Morocco, which has not increased petroleum prices since September 2000, has had to increase tariffs from 2.9 % to 3.5 % on gasoline and diesel due to the higher prices on the international market, the energy and mining ministry said in a recent statement.

Hoping to offset the burden of a 5 % increase in pump costs, Tunisia boosted the minimum wage by 3 % for some 280 000 workers, but such actions are not likely to be replicated elsewhere.

For drivers hoping for a deal, the best bet would be a trip to Uganda, where pump prices have dropped, albeit by just a shilling, since June.

Source: NEWS24