Tunisia Gas and Electricity Price Hike

Source: The Arab Weekly

The Tunisian government has confirmed an increase in gas (diesel) and electricity prices by 5-10% on Friday, May 13, 2022. This increasing gas and electricity prices has been the third time since the beginning of the year. 

The Tunisian government has decided to increase gas and oil prices by 3% per month throughout 2022. At the end of the year, the estimated price will increase by 30%. The estimated price increase will reach 30% by the end of the year (Amara, 2022). 

The government’s decision to increase gas and electricity prices is an emergency austerity over the current economic crisis. Economic crisis, as it’s considered the worst in Tunisia’s history. 

This price increase also has a significant impact on almost every sector, for example, the industrial and food industries. Furthermore, the government raised 12% of the electricity electricity prices for those using more than 200 kWh per month. 

Not only for the electricity, but also there was also an increase of 16% for those who consumed more than 30 cubic meters of natural gas in one month. In the food sector, there is an increase in the price of foodstuffs such as milk, eggs, and chicken (Amara, 2022).

What factors influence this economic crisis?

The crisis in Tunisia has occurred for a long time because of a flawed government system full of corruption. Then the COVID-19 pandemic and the Russia-Ukraine conflict exacerbated this crisis, causing the Tunisian economy to collapse.

Not only pandemic and the Russia-Ukraine conflict, but this crisis is also related to the political problems in Tunisia. 

Since last year, the Tunisians have forced President Kais Saied, who is considered to have coup d’état to be the government, to abdicate. Tunisians think President Saied is only focused on reforming the Tunisian constitution and ignoring warnings of national bankruptcy.

What is the solution taken by the Tunisian government?

The Tunisian government is trying to make a loan from the International Monetary Fund (IMF) to prevent the total collapse of their economy. However, this idea was later rejected by the Tunisian General Workers Union (UGTT Union).

They threatened to carry out mass strikes, especially among workers in the public sector and state institutions, which could paralyze Tunisia. 

However, the public asked the UGTT not to worsen the situation, which would result in freezing people’s salaries and taking further action against the Tunisians. 

It is reported that IMF representatives have visited Tunisia regularly in recent times to discuss the financing program.

Author: Joey Soesilo

Editor: Maryam Cintanya Audi, Hafsyah Azzahra, Jennifer Clara Aprilia & Viranty Yulia Putri

Reference:

Al Arabiya English. (2022, April 14). Tunisia will raise local fuel prices every month this year. Retrieved from https://english.alarabiya.net/business/energy/2022/04/14/Tunisia-will-raise-local-fuel-prices-every-month-this-year

Amara, T. (2022, May 14). Tunisia raises domestic electricity and gas prices. Reuters. Retrieved from https://www.reuters.com/business/energy/tunisia-raises-domestic-electricity-gas-prices-2022-05-13/

Tunisia hikes fuel prices for 3rd time this year. (2022, April 14). Anadolu. Retrieved from https://www.aa.com.tr/en/middle-east/tunisia-hikes-fuel-prices-for-3rd-time-this-year/2563555

Tunisia raises fuel prices for fourth time in a year as it cuts subsidies |. (2022). The Arab Weekly. Retrieved from https://thearabweekly.com/tunisia-raises-fuel-prices-fourth-time-year-it-cuts-subsidies

Yee, V. (2022, May 11). As Tunisia’s Democratic Experiment Unravels, Economic Collapse Looms. The New York Times. Retrieved from https://www.nytimes.com/2022/05/07/world/middleeast/tunisia-democracy-economy.htm