Significant price increases, particularly for fuel and electricity, are announced for next year. A more high taxation which, coupled with rising inflation, will make the purchasing power of Algerians seriously threatened, laminate.
Increases. Upward revisions. Terms which strongly mark the discourse of governments, and therefore citizens, in the coming months. Indeed, price increases, rates are announced for next year.
Increases that mainly concern fuel prices and electricity tariffs. According to the Finance Bill for 2016, adopted by the government early last September and a copy of which was made public, fuel prices (petrol and diesel) will increase significantly.
Increase in fuel taxes
Indeed, this project provides for the upward revision of rates of tax on petroleum products (TPP), in order to generate new tax revenues and help offset the budget deficit. Currently set at 1 dinar per liter for all fuels, the TPP would increase to 2.91 dinars per liter for gasoline (regular, super and unleaded) and 2.91 dinars for diesel.
In addition to TPP, the increase will also cover the value-added tax (VAT), which should increase to 17% for diesel. This, coupled with the increase in TPP induce a pump price of about 17.75 dinars for diesel. In case VAT would be maintained at 7% for this fuel, the price would increase slightly less, up to 15 dinars per liter.
Carburetion diesel will also be more expensive. Indeed, the Finance Bill 2016 would provide an insurance tax for diesel vehicles worth up to 1000 dinars a power of 5 hp and 2000 dinars for the higher powers.
The portfolio of highly stressed drivers
However, since a significant part of the fleet, even renewed, carbide fuel, and the fuel carburetion will also be affected by the adjustment, so the price increase will impact and strongly portfolio Algerians. This, besides the fact that distributors and service providers will seek further improving their profit margin.
Thus, drivers will be able to spend more for carburizing, which will strain the budget of a couple or the whole family. A fuel price increase that will translate directly into increased urban transport fares, drivers to pass on higher costs to be induced. And this, without forgetting the impact on other means of transport.
Towards more inflation
Another impact, the expected increase or soaring prices of consumer goods, including agricultural, due to increased expenses for carriers, distributors, disruptions in the supply chain ... While product prices subsidized food should remain as is, the executive does not seem to want to question the existing social policy (social transfers, price subsidies and support) despite its high cost and its proven ineffectiveness.
However, higher transportation costs and therefore the cost prices and production will represent a constraint difficult to overcome and that the Executive should seek to reverse. This will impact one way or another the purchasing power of Algerians.
The electricity will be as expensive
And purchasing power will suffer the backlash of another upward revision, those of VAT for electricity. Admittedly, the executive does not evokes changing electricity tariffs, applied since 2006 and unchanged against the financial balances of the main energy operator (Sonelgaz).
However, the planned increase in VAT to 17% for the entire electricity consumption of over 125 kilowatt-hour (kWh), the bill now reduced rate of 7% for consumption of less than 125 kWh translates implicitly the readjustment of prices frozen for a decade (set at 4.37 dinars per kWh).
This will be noticeable in the quarterly bill, noting that it reached an average of the 2500 to 4000 dinars for an average family and moderate consumption. An expense that is nevertheless aggravated by high energy consumption due to the use of air conditioners heat wave and electric boilers. And that, in the context where the housing stock is being renewed even if the use of environmentally friendly and efficient methods for lighting and heating is still low.
However, by taxing more of a level of energy consumption which Algerians are not all foreigners, the promoters of the LF in 2016 nevertheless omit the impact that will result in the costs of production and returns.
Further increases are expected
Production costs of which will certainly set to increase and that will involve the selling price of such consumer products will increase. Is a heavier burden on the budget of the Algerians, as economic operators citizens.
Further increases are planned, with regard to housing but also taxes and other related auto thumbnails (increases ranging from 500 dinars to 000 dinars according to the 18 type, engine capacity and vehicle age), the domestic consumption tax (TIC) imposed on purchases and imports of several products, including tobacco and matches, as well as access to mobile internet, mobile telephony and the acquisition of computer equipment ...
Risk to social peace
In short, 2016 will be marked by fairly substantial increases, certainly induced by the country's income falls and the need for palliative to the lack of imagination of the public authorities, but nevertheless binding on the purchasing power of Algerians.
Increases which come into force despite the ambitions of some parliamentarians to react and to propose amendments to the draft LF and despite their negative impact in terms of cohesion, social peace.
Still inadequate, despite some wage increases granted during the past decade but rendered ineffective by inflation, the purchasing power of Algerians, at least that of the vast majority, will be further weakened.
It will be rolled effect upon such high taxation, a fairly rampant and difficult to control inflation in the context of depreciation of the dinar and its direct impact on import costs.