How does a rise in fuel prices discontinue fuel subsidies?

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Africa (Commonwealth Union) _ In certain areas of Cameroon, the cost of gasoline has doubled following the elimination of government fuel subsidies in neighboring Nigeria by President Bola Tinubu. Nigeria, being a major oil producer in Africa, sees subsidized petroleum products frequently smuggled into Cameroon and sold informally. With the removal of the subsidy, business owners in Cameroon are facing difficulties as fuel prices continue to rise.

Traders located in towns and villages along Cameroon’s border with Nigeria report a decline in business since President Bola Tinubu’s announcement to end fuel subsidies on May 29. The border between the two countries stretches over 2,000 kilometers, facilitating the trade of goods such as cattle, cotton, food, and various other products.

Alphonsine Ngaba, a 33-year-old merchant, purchases body lotions, perfumes, and cosmetic products from Nigeria for resale in Limani, a town in northern Cameroon. She explains that the fuel subsidy removal has resulted in a shortage of fuel, adversely affecting trade on both sides of the border. Ngaba reveals that numerous merchants returning from Nigeria have been stranded in Limani for three days, as fuel scarcity has immobilized several transport trucks, vehicles, and motorcycles. Over the past two weeks, towns and villages situated along Cameroon’s border, which rely solely on Nigeria for petrol, have experienced fuel shortages.

Ngaba further notes that a few drivers entering Cameroon complain about the expensive fuel in Nigeria and have raised transportation fares by more than double to compensate for it.

According to Cameroon’s National Institute of Statistics, in 2022, more than 30 percent of Cameroonians purchased petrol from Nigeria. While Nigerian petrol was priced at around 50 cents per liter, petrol supplied by Cameroon’s state oil firm, SONARA, cost over one dollar per liter.

President Tinubu of Nigeria cited the extensive smuggling of petrol into countries such as Cameroon, Chad, and Benin as a reason for discontinuing the subsidy.

Donatus Manga imports petrol from Nigeria and sells it in Buea, a town near Cameroon’s southwestern border with Nigeria. He laments that the price of petrol from Nigeria has more than doubled in the past ten days, significantly impacting his business. Manga reveals that he used to sell up to 2,000 liters a day, but now struggles to sell even 200 liters due to the increased cost of petrol from Cross River state, Nigeria. He adds that his supplier has been unable to import petrol from Cross River state for the past two weeks.

Civilians residing in Cameroon’s border towns and villages claim that the fuel situation has also caused a 15 percent increase in prices of essential goods and motor spare parts imported from Nigeria.

To address the fuel shortage, the Cameroonian government has announced its plan to supply petrol to affected towns and villages in need.

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