Algeria's oil minister on
Sunday called on OPEC to cut production and raise the price of oil, which has
plunged dramatically in the last six months.
The call by Youcef Yousfi
to the Organization of Petroleum Exporting Countries, of which Algeria is a
member, comes as the country is struggling to deal with a halving of oil prices
from $120 barrel to $60 a barrel.
"For us, OPEC has to
intervene to correct the imbalance and cut production to bring up prices and
defend the income of its member states," Yousfi said in remarks carried by
the state news agency.
While Algeria has some $200
billion foreign reserves, enough to cover imports for the next several years,
it is heavily dependent on its oil revenue which provides 97 percent of its
hard currency income and 60 percent of the budget.
In a cabinet meeting
Tuesday, President Abdelaziz Bouteflika for the first time expressed concern
over the "worrisome" situation and made vague promises of
cost-cutting.
The first of such austerity
measures came Saturday when Prime Minister Abdelmalek Sellal said there would
be a freeze on public sector hiring in 2015. Some 60 percent of the jobs in the
country come from the government.
Major infrastructure
projects, such as public transportation in Algiers and highways in the
countryside are also expected to be put on hold.
Long flush with money from
its gas and oil exports, Algeria operates an extensive welfare state.
Subsidies, which amount to
21 percent of the country's annual economic output, cover electricity and many
foodstuffs. Gasoline is the cheapest in North Africa.
The government also
subsidizes education and provides housing. Social unrest, even before the
scattered protests of the Arab Spring, was effectively bought off with higher
wages and promises of housing — all funded by the bountiful oil receipts.
(pennergy.com, Dec. 29)