The draft state budget for 2024 allocates TND 7,086 million to subsidies for hydrocarbons and electricity, compared to TND 7,030 million in 2023, an increase of TND 56 million.
This expenditure is divided between the Tunisian Electricity and Gas Company (STEG) with TND 4,019 million and the Tunisian Refining Company (STIR) with TND 3,067 million.
According to the draft state budget for 2024, published on the parliament’s website, subsidies for hydrocarbons and electricity have increased significantly over the past two years, reaching 5.3% of GDP in 2022 and an estimated 4.4% of GDP in 2023. This increase is attributed to currency volatility and international oil price fluctuations.
The government’s objectives, as outlined in the draft state budget for 2024, include the continuation of subsidy for hydrocarbons and electricity, while striving for better cost management.
The budget document proposes to achieve this objective through the implementation of mechanisms to control the consumption of hydrocarbons in the public sector, awareness campaigns to promote the rational use of petroleum products, and fiscal measures to encourage the adoption of alternative and clean energies, particularly solar and wind.
In addition, the government intends to promote private sector electricity production, especially from renewable sources, and to establish a regulatory body for the electricity sector.
The projections for hydrocarbon and electricity subsidy expenditure are based on various assumptions, including an estimated Brent barrel price of around $81 (Brent prices are expected to fluctuate between $80 and $87 per barrel in 2024, according to international organisations).
These projections also take into account the stability of the Tunisian dinar against the dollar, a 7% increase in national consumption of petroleum products, a 3% increase in electricity consumption and the partial repayment of amounts owed to the STIR, amounting to approximately TND 220 million.
Increase in transport subsidies
The state has also increased the allocation for transport subsidies to TND 660 million, compared to TND 640 million in 2023. These funds will be used to subsidise school and university transport, as well as discounted and free transport services.
The draft budget also provides for an allocation of TND 8,359 million under the category of “intervention costs”, compared to TND 7,693 million in 2023, an increase of 8.7%.
This allocation includes a sum of TND 3,353 million for interventions in the social, economic and cultural sectors aimed at strengthening the state’s social role in income distribution and poverty alleviation.
The draft budget for 2024 is expected to allocate approximately TND 11,337 million for subsidy expenditure, compared to TND 11,475 million estimated for 2023. This represents a decrease of 1.2%.
The subsidy budget represents 19% of total budget expenditure and 6.5% of GDP.
Source: Agence Tunis Afrique Presse