Speaking to Lusa, the official stated that the government's decision “was predictable” and is in line with the announced path of gradual withdrawal of subsidies.
“It is not sustainable to continue with the highly subsidized price. We are subsidizing millions and millions, and this cheap fuel enriches economic operators in neighboring countries such as the Democratic Republic of Congo and even Namibia to a certain extent,” he said.
According to José Severino, the price differential creates dangerous smuggling networks.
“The operator never buys at the subsidized price in that country, he pays the real price, which is more expensive than in Portugal, and buys here at a fifth of the price. We end up creating networks that are dangerous, even for the country's sovereignty.”
The increase in the price of diesel, from 300 to 400 kwanzas per liter, came into effect on Friday and represents the second increase of the year, within the scope of the policy of progressive withdrawal of fuel subsidies.
The AIA leader argued that the resources spent on fuel subsidies should be channeled to priority social sectors. “We need roads, schools, sanitation. We are in the process of making up for lost time. Any amount of money is not enough,” he said.
The government intends to align domestic prices with market values by the end of 2025, freeing up public resources for sectors such as health, education and infrastructure.
Since 2023, gasoline has risen from 160 to 300 kwanzas per liter, while diesel has gone from 135 to 400 kwanzas, accumulating increases of more than 120 percent.
The elimination of subsidies represents an estimated saving of 400 billion kwanzas per year, in a fiscal consolidation effort supported by international partners such as the IMF and which, according to the executive, aims to free up resources.
When asked about the impact of the measure on business, José Severino ruled out any significant impact on industry, indicating that “90 percent of the industrial park already has electricity” and that the greatest impact will fall on public companies such as Prodel (a state-owned electricity production company), which still use diesel to generate electricity in some regions.
“The greatest impact will be on agriculture and fishing, but even there diesel continues to be highly subsidized,” he said, noting that there are mechanisms to support the most vulnerable producers.
“Amongst fuels, in Angola, is reflected in the cost of goods,” he admitted, recalling, however, that the first increase of the year had no impact on inflation and believing that “it won’t have any impact now either” because “the margin is still comfortable to maintain current prices.”
The president of AIA also warned about the costs of maintaining subsidies, since “subsidizing involves border control mechanisms, inspection services, external security, the army, and the police. It is a distraction from the country’s fundamental problems and an additional expense.”
As for public transportation, Severino downplayed the risk of a price hike: “90 percent of taxi services are fueled by gasoline, and gasoline has not been changed”.
The industrialist reiterated that the policy should be accompanied by well-targeted mitigation measures, such as agriculture and fishing, which “can be directly subsidized so that there is no impact on the cost of the goods they produce.” Furthermore, the rationalization of fuel spending should be part of a broader policy also aimed at improving roads
.“The government has already accepted the toll policy. We will have permanent road maintenance and, right there, the GDP could grow by 5 percent.
Part of the agricultural production is currently not being transported due to a lack of roads,” the community leader pointed out.
For José Severino, the gradual withdrawal of subsidies is positive and inevitable because “we need to channel these funds to education and health, where we have large deficits. There is no more oil. Oil today is almost only used to pay debts”.
