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The Chad News Archive

Fuel Prices Soar in Chad

Reuters (10/19/11)

Chad has raised the price of locally produced and refined fuel products, drawing criticism from many in the Central African state which only started refining it own oil in June this year.

Chad's first oil refinery, a joint venture with China National Petroleum Company, last month suspended production, saying the price agreed with Chadian authorities to supply them was driving it into heavy losses.

The price hike comes as several countries across West and Central Africa -- including Cameroon, Nigeria and Guinea -- have come under pressure to slash state subsidies on petroleum products, which are eating into government budgets.

The price of a litre of petrol in Chad has risen to 490 CFA francs ($1) from 330 CFA, while diesel has risen to 495 CFA from 374 CFA, according to a government statement read on state television over the weekend.

A 6 kg bottle of cooking gas now costs 2,900 CFA, up from 1,900 CFA, the statement added.

Daouda El Hadj Adam, president of national consumer association, said he was "stunned" by the move.

"It is unacceptable. The prices must come down immediately. The government must get civil society involved in talks so we can agree on the price," Adam added.

Mbailassem, who was lined up at an Oil Libya petrol station in N'Djamena, accused the government of being insensitive.

"Instead of paying nearly 500 francs, I will go to Kousserie (in neighbouring Cameroon) to buy my fuel for 350 francs," he added.

No official reason was given for the price increases at the weekend but a government source told Reuters that the hike was unavoidable due to production costs and the $80 per barrel the refinery has to pay to buy oil.

"(Previous prices) were political and could not be sustained given the economic reality," said the source, who asked not to be named.

"The refinery had lost tens of millions of dollars over the course of three months of operations. That could not continue," the source added.

Chad produces some 115,000 barrels of oil per day and the launch of the 20,000 barrel-per-day refinery in June was hailed as making the central African crude oil exporter energy independent, with production due to be ramped up to 60,000 bpd.

The 588-million-euro refinery is 60-percent-owned by China National Petroleum Company, with state firm SHT holding the remaining stake.

"This is a decision that has not been thought through," said a teacher, who was filling up his motorbike but only gave his name as Djimasde.

"How can they raise the prices like that when the refinery is less than 50 km from here?" ($1 = 479.4 CFA Francs)

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