Identifier
Created
Classification
Origin
08CONAKRY64
2008-04-01 14:08:00
UNCLASSIFIED
Embassy Conakry
Cable title:  

GOG REDUCES FUEL SUBSIDY, PRICES RISE BY 62%

Tags:  ECON PGOV ASEC PREL GV 
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DE RUEHRY #0064 0921408
ZNR UUUUU ZZH
P 011408Z APR 08
FM AMEMBASSY CONAKRY
TO RUEHC/SECSTATE WASHDC PRIORITY 2359
INFO RUEHZK/ECOWAS COLLECTIVE
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
RHMFISS/HQ USEUCOM VAIHINGEN GE
UNCLAS CONAKRY 000064 

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV ASEC PREL GV
SUBJECT: GOG REDUCES FUEL SUBSIDY, PRICES RISE BY 62%


UNCLAS CONAKRY 000064

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV ASEC PREL GV
SUBJECT: GOG REDUCES FUEL SUBSIDY, PRICES RISE BY 62%



1. (U) Late in the evening on March 31, the Guinean
Government announced that the country's fuel prices would
increase from 4,300 GnF per liter to 7,000 GnF per liter
($.97/liter to $1.59/liter),effective midnight. So far, the
population's reaction has been relatively quiet. There have
been a few small-scale demonstrations reported, with
incidents of rock-throwing and roadblocks, which were
primarily the result of students being unable to find
transportation to school. In all cases, the police, who were
armed with tear gas, responded quickly to peacefully disperse
the crowds. There have not been any significant disruptions
to traffic flows or regular commercial activities.


2. (U) Embassy staff observed far fewer taxis on the road
with long lines at taxi stops as passengers waited for
transportation this morning. Many people were observed
walking to their destinations. Embassy LES staff reported
significant delays in getting to work due to difficulties in
finding transportation. One LES reported that she waited
over an hour for a taxi. Another said that he could not find
a taxi at all and was getting ready to rent a vehicle from a
local rental company, at triple the normal rate, when another
LES passed by in his personal vehicle and offered to take him
to work.


3. (U) Taxi prices were all over the map. The Guinean
Government regulates taxi rates, although LES staff report
that the official rates are generally ignored. Those LES who
could find a taxi this morning reported significant price
increases in their individual fares, with most ranging from
58% to 62%, but several reported fares that were twice the
normal amount.


4. (U) According to various press reports, including an
interview with the Minister of Commerce, the Guinean
Government plans to offer some other forms of economic relief
to help alleviate the burden of higher transportation costs.
These measures reportedly include reducing prices for rice,
offering reduced transport fares for students, and increasing
stipends for university students. However, the government
has not yet indicated how or when these additional measures
might be implemented.

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COMMENT
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5. (U) The fuel price increases are not a surprise to the
population since they have been the subject of widespread
rumors since early January. The fact that the Guinean
Government has finally taken a concrete step towards
eliminating the program should help demonstrate its
commitment to progress under its IMF program. Embassy will
continue to monitor the situation closely as the reality of a
62% increase in fuel prices sets in. As in much of the rest
of the world, the population is already suffering from rising
world commodity prices, and local prices for basic staples
are expected to increase relative to increased transportation
costs, which could exacerbate the situation. END COMMENT.
CARTER