The Suriname government has announced plans to phase out subsidies for gas, electricity and fuel as it seeks to reduce expenditure and keep within the guidelines of the International Monetary Fund (IMF).
The government said while there will a social program is being implemented to help the vulnerable groups in the society, Finance Minister Stanley Raghoebarsing told a news conference late Monday the reduction also has to do with the IMF program.
“It is not sustainable to continue the subsidies we give,” he told reporters, adding “per month there is a subsidy for fuel, mainly diesel, of SRD350 million (One SRD=US$0.03 cents).
“That is something that we cannot afford. It costs more than two billion SRD a year. Our taxpayers and our state apparatus cannot afford that. That needs to be adjusted. The subsidy on diesel was SRD10. It was asked to phase it out in two steps. Today is the first step of five SRD. The second step will come about a month later,” he added.
According to the government, diesel must be reduced by SRD10 per liter, with electricity SRD260 per connection and “gas bombs’ of 28 pounds, more than SRD400 each.
Raghoebarsing said the government pays out SRD50 million to two gas companies, SOL and Rubis every week even as the two companies made limited deliveries over the last weekend because the suppliers now have to pay before fuel can be obtained.
The authorities say discussions with the oil companies continue about payments and the details of prices at the pump and the finance minister said there is no reason for long queues and hoarding.
He said the subsidy to the energy company, EBS, will cost the state SRD3.2 billion this year, as he responded to questions regarding the phasing out subsidies for power consumption.
“Everyone who is affiliated with EBS, rich or poor, receives a monthly subsidy of SRD260. That costs SRD42.5 million per month, more than half a billion per year. And not everyone has that (subsidy) needed. Give it to the poor people, not the rich.”
Natural Resources Minister David Abiamofo told reporters “the IMF wants us to increase the price of electricity in a number of terms, four times 20 percent.
“But if we look at the social and political barometer, then we have to hold on for a while and see whether we can use other instruments. The point is that the subsidy must be reduced.
CMC/
