Commentary: The President’s Oxygen Balloon

Whereas the Cameroonian people were still grappling with the psychological weight of the recent decision stepping up fuel prices, a Presidential Decree signed on July 7, 2014, came just in time to attempt to reduce the pain before it gets deeper.

The two Presidential decisions, one; a decree revalorizing the basic salaries of civil servants and the military by five per cent and the other; an Ordinance reducing special tax on petroleum products, global and axle tax as well as parking fee concretizes the engagement of the State to attenuate the effect that the increase in fuel prices could have on the population.

The reaction provoked by the increase in fuel rates did not surely come as a surprise especially when one considers the weak purchasing power of the population. Government, from every indication was aware of this and that explains why government ministers have been on their heels trying to sensitize the population, notably businesses not to take advantage of the situation and increase prices of goods and services.

The decision of the Head of State is an additional oxygen balloon set up to relieve the pain the increase might have caused. As explained in the government decision of June 30 altering the price of fuel, government subsidies on petroleum products have been exerting too much pressure on the State budget depriving the population from enjoying certain infrastructural and social facilities.

In effect, between 2008 and 2013, the State spent FCFA 1,200 billion as fuel subsidies.

In the same vein, FCFA 157 billion has already been spent within the first half of 2014 to subsidize fuel prices. Government’s reasoning wave length is that these financial resources could have been diverted into projects that will benefit the greater majority of the population.

Protecting The Consumer

That notwithstanding, care must be taken to ensure that the population is not completely crushed by the said decision. The Presidential act revalorizing the monthly salary of civil servants and the military and reducing taxes on petroleum products constitutes one of the major measures to reduce the shocks on the consumer who, in most cases, bear the greater part of the burden.

According to the Presidential Decree, basic salaries of State workers have been increased by five per cent with effect from this month. Articles: 231, 234, 611, C46 and C95 of the General Tax Code, according to the Presidential Ordinance have been modified in order to step down special tax rates on fuel and petroleum products, global tax rates, axle-tax and parking fee. Special Tax for Super fuel will henceforth cost FCFA 80 a litre and FCFA 60 a litre for Diesel.

Special tax on petroleum products have partially been transferred to royalties on road usage where FCFA 75 will be deducted from a litre of Super and FCFA 60 from a litre of diesel. Vehicles of between three and five tonnes will henceforth pay FCFA 4,500 as axle tax, those between five and 16 tonnes FCFA 9,375, those between 16 and 20 tonnes, FCFA 16,875, those between 20 and 30 tonnes, FCFA 28,125 and vehicles that can carry above 30 tonnes, FCFA 37,500.

Global tax for transporters will be levied by councils wherein category A will pay between FCFA 0 and FCFA 10,000; category B between FCFA 10,001 and FCFA 20,000, category C, from FCFA 20,001 to FCFA 25,000 and D from FCFA 25,001 to FCFA 50,000. In the same vein, quarter parking fee for motorbikes will stand at FCFA 1,500; taxi cabs at FCFA 5,000 and Buses at FCFA 7,500.

This Presidential act and other governmental measures have as objective to ensure that prices of goods and services remain at par. Unfortunately, opportunists are already in action stepping up prices illicitly without the slightest consideration to the effect it can bring to bear on consumers.

A case in point is that of inter-city transporters. Passengers travelling from Yaounde to Bamenda are compelled to pay additional FCFA 1,000 indicating a percentage increase of 20. Diesel which is the main fuel used by inter-city buses witnessed an increase of 15 percent. Perhaps it is necessary that government extends its control tentacles to this section of activity before it is too late.