Algeria refuses to subsidize oil and settles for barely

Algeria's government has officially refused the proposal of trade minister El Hachemi Djaaboub on expanding the list of subsidized food to include oil, dried legumes, and preserved tomatoes. A study conducted by the trade ministry estimates its financial effect at 12 billion dollars.

• Among the observations of the study office at the ministry of finance, the trend towards a new grants-in-aid policy does not serve the new economic options. Though, the finance ministry rejected demands of reducing fees of these products.
• The Finance Ministry’s report, which was submitted to the prime minister before the complementary finance bill had been presented for discussion at the inter-ministerial council last week, mentioned that the executive branch took 163 billion Algerian dinars – equivalent to 1.6 million Euros last year- from public treasury to subsidize the most consumed products. That means government would be obliged to double the money allocated in this regard.
• The State’s intervention to manage crises caused by food prices rise last year, including potatoes, milk powder and even semolina. Additionally, the public treasury recorded loses because of some measures included in the preliminary finance law for the current year estimated at 9.6 billion dinars.
• According to the content of the complementary finance draft law due to be programmed for approbation in the next council, the government will not intervene in subsidizing any consumed products, whether they are oils or pulses.
• The government allocated 117 billion dinars for subsidizing these products. More than 110 billion of them were for wheat and 7.5 billion DA to subsidize the difference in barley.
• The government’s refusal to subsidize other food and to spend more money to cover its grants-in-aid policy came to refute Prime Minister Abdelaziz Belkhadem’s previous statements.
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