Cameroon’s government is likely to increase fuel pump prices in 2025, marking the third increase in three years. According to the 2025 Finance Bill presented to Parliament on December 1, 2024, fuel subsidies will be reduced from CFA263 billion in 2024 to just CFA15 billion in 2025. This is a reduction of nearly CFA250 billion.

The government stated that the reduction in subsidies aligns with instructions from the president and the ongoing effort to reduce common budget items. The goal is to strengthen the policy of reducing fuel subsidies, which the government claims take up resources that could be used for public investment.

This planned reduction makes a fuel price increase at the start of 2025 more likely. The government has already committed to completely eliminating fuel subsidies as part of its economic program with the International Monetary Fund (IMF). This program, originally set from July 2021 to July 2024, has been extended to 2025.

The first price increase occurred in 2023, followed by another in 2024. Official data show that these increases have significantly reduced the burden of subsidies on public finances. In 2022, fuel subsidies exceeded CFA1 trillion, as revealed by the president during his New Year’s address on December 31, 2023. After the first price hike in 2023, subsidies dropped to CFA640 billion, a reduction of CFA360 billion in one year.

In February 2024, a second price increase of 15% for gasoline and diesel was implemented, bringing the subsidy down to CFA263 billion—about CFA100 billion less than in 2023. The proposed reduction to CFA15 billion in 2025 would represent a drop of nearly CFA250 billion.

Given the scale of this reduction, the price increase in 2025 could exceed the 15% rise seen in 2024. In early 2023, the government raised diesel prices by 25% and kerosene prices by 36.5%, especially for industrial users. These actions highlight the government’s determination to phase out subsidies completely.

However, Fitch Ratings, a U.S.-based credit rating agency, noted that Cameroon might hesitate to implement another price increase in 2025 due to the upcoming presidential election in October 2025. The government could avoid raising fuel prices to maintain public support, despite its commitment to the IMF to eliminate subsidies.

Source: Business in Cameroon