Angola has followed in Nigeria's footsteps by reducing its gasoline subsidy, resulting in almost double the pump prices in the nation that boasts some of the world's cheapest fuel.
This decision comes in the same week that Africa's largest oil producer, Nigeria, removed its subsidy, which caused a threefold increase in pump prices. These two countries' actions demonstrate the pandemic's economic impact on oil-producing nations and how even their subsidies may be unsustainable.
Background on Fuel Subsidy
Fuel subsidy is when the government pays some money for selling gasoline cheaper at the gas station. Many countries have this subsidy to help people save money on fuel. However, sometimes the government needs help to keep giving money for this, so they must stop the subsidy. This means people will have to pay more for gasoline. That's what happened in Nigeria and Angola this week.
Angola's Fuel Subsidy Cut
Angola is a country in Africa. They recently decided to cut their gasoline subsidy. That means that they will stop giving extra money to make gasoline cheaper.
This decision makes gasoline prices almost twice as expensive. Angola used to have very cheap gasoline, but now it will cost more. This is similar to what Nigeria did. Nigeria also cut its gasoline subsidy, and its prices tripled.
Emulating Nigeria's Approach
Angola looked at what Nigeria did and decided to do the same thing. Nigeria stopped giving money to make fuel cheaper. Angola did that too. Now, people in both countries must pay more to buy gas.
Conclusion
Angola has joined Nigeria in cutting fuel subsidies, causing pump prices to increase. This may help the countries save money, but it also means that people will have to pay more for gas. It is essential to find ways to balance the need for savings with the requirements of citizens.
