Fuel price rise hurts frustrated urban poor

Prices at Angola's petrol pumps leapt around 70 percent this week as the government pruned fuel subsidies, angering motorists, sparking higher prices all round and raising fears of civil disorder. The cost of a litre of petrol jumped from 20 kwanzas to around 34 kwanzas (about US $0.40), while diesel prices soared to 25 kwanzas from 14 kwanzas. The price of other oil-derived products rose by similar margins. Angola is the second largest crude producer in sub-Saharan Africa after Nigeria, and with demand propelling oil prices to above $55, ordinary Angolans are wondering why they are yet to see the benefit. The government says any oil windfall - estimated by Finance Minister Jose Pedro de Morais to be around $600 million for this year - is a mixed blessing because much of it will go on repaying oil-backed loans and spending on subsidies to keep oil prices low on the streets. That is one of the reasons why the government has pledged to cut such subsidies. But with many Angolans living in poverty after almost three decades of civil war, higher prices is the last thing they need. "This is just going to create more poverty, because when the price of petrol rises in Angola, the price of everything else goes up too," said Alex Fonseca, a 25-year-old office worker. Fonseca does not own a car, but he is worried about the knock-on effects on the cost of other goods and services. "Once fuel costs rise, the price of taxis goes up, food costs more in the shops and people become even poorer - it's not only those with cars who will suffer," he said. Already, 'kandongueiro' or taxi-bus fares have risen to take account of the latest hike. "I didn't get home until nine o'clock the other night because I ran out of money for my taxis," said Lucia Pinto, a maid working in central Luanda but living in the suburb of Benfica. "Normally I take three taxis, each at 30 kwanzas, so I need only 100 kwanzas to get home. Now the same trip is costing 150 kwanzas. I had to save money and walk the last leg to make sure I could get to work the next day," she told IRIN. Organisations such as the International Monetary Fund argue that Angola should trim its subsidies because the money could be better spent on social services. De Morais said in an interview with Reuters that the government's strategy was a phased approach to avoid the civil unrest that had plagued Nigeria, but planned to chop support to one percent of GDP in 2005, from around seven percent in 2004. One aid worker said subsidy cuts and the resulting price hikes would only make the poor worse off and would fuel a sense of frustration, already mounting amid the lack of a peace dividend and tangible benefit from the country's oil. "These price increases are a problem. People have already had it up to here - they simply don't have space to manoeuvre; they cannot get any more money," the aid worker said. "Everybody increases their prices to compensate, but who is really paying? The poor - and they are the ones who don't have anything now." Some observers fear Angola may take a leaf from Nigeria's book, where similar efforts to slash subsidies sparked civil disorder and general strikes. "People are very angry about the rise in fuel costs. They could revolt one day," Fonseca said. But a climate of fear left over from Angola's wartime days would prevent any large-scale protests, at least in the near term, analysts told IRIN. "Who will lead any demonstrations or protests? No-one wants to draw attention, because they fear that they will be shot [by the police] or lose their job," Fonseca said.