Finance Minister, Abderrahmane Raouya, stated on Tuesday that the Government had been compelled to impose fuel price increases for the third year in a row, especially as the Public Treasury is no longer able to cope with the huge budget deficit as the latter has been eroded by the state’s fuel subsidies, while stressing that the Government will not introduce new taxes and new fees over the next two years.
In his response to the concerns of deputies of the National People’s Assembly on the occasion of the discussion of the Financial draft Law 2018 on Tuesday, Mr. Raouya said that Algeria produces 11.5 million tons of fuel and consumes 14 million tons annually, which makes it import 3.2 million tons, adding that the Government intervened annually to pay the public debt estimated at 900 billion dinars resulting from the import of 3.2 million tons of fuel.
According to the finance minister, the projected hikes in the price per liter of fuel of the type of “premium petrol” will be set at 41.39 dinars and 40 dinars, 89 dinars for “unleaded petrol” while the price of “diesel” will be fixed at 22.53 dinars per liter, stressing in this connection that these price hikes will expand tax revenues and will give the Government more room for maneuver, by garnering several billions estimated by experts at $ 6 billion Dollars, or the rough equivalent of 6,000 billion centimes, (DA).
Following the announcement by the Minister of Finance that the Government won’t impose taxes and new duties on citizens during the preparation of finance laws 2019 and 2020, the opposition MPs at the National People’s Assembly linked the minister’s statement to the upcoming presidential elections, which the authorities want to organize quietly, and to head off any “social unrest” in 2018, a year before the presidential polls.
In response to some MPs criticism of the Government’s failure to provide social support to its recipients and stop pumping $ 17 billion into social transfers, Finance Minister Abderrahmane Raouya said: “The Government does not want to rush along to develop a program that identifies the list of families concerned with state support, adding that this scheme geared for the needy sections of the Algerian population, which actually deserve the support of the State, will not be implemented before 2020, stressing that all mechanisms will be put in place for its success, while ensuring that the low income earners are not excluded.
“The budget allocated for social transfers rose by 8 percent compared to the previous year”, he said.
Regarding the national banking sector, the Minister of Finance said that the Government is betting on the success of the Islamic products that will be launched by public banks in the coming weeks, in order to stimulate savings and benefit from sleeping funds in Algerian homes.
“We need to go into a new generation of banking system and banking reforms to greatly upgrade the quality of financing and banking integration,” he underscored to this effect.
For the first time, the Government, through relevant provisions contained in the draft of the Finance Act of 2018 is set to open the door to Islamic transactions, and has thereby approved the licensing of three public banks to launch these banking products, in order to attract the financial bloc traded in the sprawling informal market, as well as to try to convince those people who are concerned about conventional banking interest rates which are prohibited under the Sharià religious law.