Fuel: prices rising thrice more than usual

Gas station managers and oil companies are finally allowed to recover a higher margin. This umpteenth fuel price rise will however also reflect the international market and its skyrocketing crude oil prices. The usual rise rate traditionally amounted up to Ariary 100; this time around, the urban population will have to cope with MGA 300 at once. So sounds the explanation advocated by industrials. Nothing yet capitalized; nothing but side effects.

Gas station managers refuse to supply the capital city with enough fuel, officially in order to avoid losses. So, instead of ordering 4000 pds, one gas station merely orders one half of it. Too many anticipating drivers are actually longing for storing fuel purchased at the current price.

The ruling power’ subsidies granted to oil companies and urban transportation unions proved as so insufficient as irregularly paid. These economic actors consequently prefer by far catching up with the market. A 66% high rise is being rumored concerning urban and suburban transportation, namely a jump from Ar300 to Ar500 for the lift downtown.

A ticket at Ar400 seems to be the unpopular but compulsory common ground. National companies are working a less sharp rise out, but no less than 10%, even though gas price rises are likely to exceed this threshold. Having to withstand a rise amounting to the one year long lost time’s price would cause terrifying consequences.

Everyone did know about it from scratch: the ruling power’s promise to reduce fuel consumer prices since Madagascar has Oil in its guts was a fairytale. Nothing similar can be expected during the next 10 or 15 years. The real concern is the year 2012’s real inflation rate compared to the ruling power’s optimistic prediction of 10%. Oil prices are actually impacting on whatever good ever requiring a lorry.

Although, the ruling power still dares to boast from fuel prices in Madagascar, as part of the world’s most affordable ones. After the capitalization of the MGA300 high price rise, a liter of gasoline will cost some Ar3400 Ariary, or 1.4 Euros. It is without a shadow of doubt cheaper than the 1.6 Euros applied in France. The difference is that the minimum Malagasy wage is the same as 30 liters of gas while the French one is largely enough to fill up 100 times. This fuel price rise will bear with certainty a couple of consequences: burdening the Malagasy spending power further more and slowing a vegetating economy down