Tunisia has taken advantage of the recent collapse in global oil prices to introduce an “automatic monthly price adjustment mechanism” for domestic sales of gasoline and diesel. The halving of international oil prices since the start of 2020 is giving Tunisia room to cut its retail prices for gasoline and diesel while at the same time substantially reducing its burdensome fuel subsidies bill.

Liberalizing fuel prices thus for now appears a painless way to make the end of subsidies stick – the idea is that if and when international prices rise again above domestic ones then Tunisia’s prices will ‘automatically’ rise in line. (CONTINUED - 630 WORDS)