TUNIS- Sharply rising oil prices will have "major effects on public finances" and Tunisia is heading towards raising domestic fuel prices again within days, a Tunisian government official told Reuters on Friday.
Tunisia, which subsidises domestic fuel prices, was already seeking a foreign rescue package to help it avert a looming crisis in its public finances before the crisis in Ukraine led to a big increase in global oil prices this week.
The 2022 budget is based on an average oil price of $75 a barrel, so higher purchasing costs could widen the forecast fiscal deficit already equivalent to 6.7% of the economy.
Last month the energy ministry said each increase of one dollar in the price Tunisia had to pay for hydrocarbons would cost the state 140 million dinars ($48 million).
Tunisia had already suffered years of economic stagnation before last summer when President Kais Saied seized most executive powers and moved to install one-man rule.
However, analysts say the threat of a major economic crisis in Tunisia could derail his promised efforts to remake the country's political system after his rejection of the democratic 2014 constitution. (Reporting by Tarek Amara, writing by Angus McDowall; Editing by Hugh Lawson)
Reuters
