INFLATIONARY MADNESS
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If you were indulging in a past-Budget grumble at the 2p/lit rise in fuel, you should spare a thought for the poor motorists of Angola. On 3 February their government announced a 1,600% (yes, 1,600%) increase on the price of fuel to take place the following day. Thinking it was all a terrible mix-up by some bureaucrat adding a couple of extra zeros by mistake, drivers were horrified when they went to fill up to discover the awful truth. The price really had risen from 4 cents a are to TO cents. The irony is that Angola is an oil producer-95% of its foreign currency comes from oil exports.
The government grudgingly explained that it was responding to demands from the IMF to bring fuel prices into line with global norms. However, it omitted to say that the IMF's request had been for a gradual increase over two years. It wanted the government to remove the state subsidy for petrol and invest the money instead in public sector salaries. Suddenly our Chancellor doesn't seem so bad.