The recurrence of diesel shortages in Gabon is bringing a highly strategic subject back into the spotlight: the cost of public subsidies for petroleum products. Every year, the Gabonese State allocates between 50 and 100 billion CFA francs to artificially keep the prices of gasoline, diesel, and kerosene low at the pump. In its recent analysis, the daily newspaper L’Union questions the sustainability of such a mechanism and puts forward a concrete hypothesis: what if the government increased a liter of gasoline by 200 CFA francs and diesel by 150 CFA francs?
Across the continent and particularly within the Central African Economic and Monetary Community (CEMAC), Gabon stands out as an exception by applying the lowest petroleum prices. Its neighbors, such as the Central African Republic, Cameroon, and Equatorial Guinea, have already implemented upward adjustments to ease the pressure on their public finances.
If an increase of 200 CFA francs on gasoline, currently sold at 595 CFA francs, and 150 CFA francs on diesel, sold at 575 CFA francs, were to be applied, Gabon would finally align with the regional average. According to information gathered by L’Union, this gradual removal of subsidies was initially planned for the end of 2026, but it could accelerate in the face of current budgetary imperatives.
International institutions, starting with the World Bank and the International Monetary Fund (IMF), agree that generalized subsidies benefit wealthy households more than the most vulnerable. Indeed, this mechanism swallows nearly 1% of national GDP, restricting the State’s capacity to finance other crucial sectors such as education, healthcare, or infrastructure development.
Rather than maintaining this system, which is deemed inequitable, the central recommendation of experts lies in setting up a social register to precisely identify modest populations in order to offer them targeted social protection. For public transport, preferential rates could be maintained in order to preserve the daily purchasing power of citizens.
Eliminating or reducing this state aid will inevitably lead to a price increase and a mechanical drop in purchasing power for part of the population. Students, retirees, the unemployed, or businesses: the effort will be shared by society as a whole.
Nevertheless, as an industry specialist interviewed by L’Union points out, putting an end to the subsidy at the pump is the key to freeing up essential budgetary leeway and guaranteeing the country’s long-term economic balance. The National Commission for Petroleum Products (CNPPP) could soon rule on the modalities of this inevitable transition.
Source: Gabon Media Time (Gabon)
