In Madagascar, the pump price of gasoline and diesel has been frozen for two years. A freeze made possible by the State which makes up the difference. This counterweight affects public accounts. The liabilities are estimated, at the end of 2024, at several tens of billions of ariary. The IMF requested, last October, “the establishment of a mechanism for automatic adjustment of fuel prices”.
In Madagascar, the price of gasoline and diesel has not changed since July 2022. Despite fluctuations in the dollar and the cost of transport, the liter of unleaded still sells at 59 ariary (0.012 €) and 49 ariary for Diesel (€0.010).
This status quo would be impossible without the financial intervention of the State. For two years, the increases have been offset by public funds. This generosity is digging a hole estimated today at tens of billions of ariary, writes Midi Madagascar.
This exceptional situation did not escape the International Monetary Fund, which in the program financed by the Extended Credit Facility (ECF), had provided for this mechanism for automatic adjustment of prices at the pump. This measure should have ended in June 2024, but the end of the measure had been postponed.
This sensitive subject returned to the heart of discussions in October 2024. IMF representatives insisted on “the establishment of an automatic adjustment mechanism for fuel prices”, a measure that they estimate “crucial for managing fiscal risks by adjusting pump prices monthly to reflect changes in market prices.”
-Observers emphasize that this condition is essential for the implementation of other measures of the program financed by the Extended Credit Facility (ECF). This plan includes financial aid of 200 ariary per liter of fuel purchased by Madagascar.
Clearly, without the adjustment of prices at the pumps, IMF aid would be partially cut from essential financing for “the realization of major infrastructure projects necessary au development of the countryspecifies the editor.
Swiss
