Tunisia: NCA - Revision of Compensation System

Tunis — Prime Minister Ali Larayedh estimated, on Wednesday at the National Constituent Assembly (NCA), that the revision of the compensation system has become urgent "today," especially as studies have shown that only 12% of the subsidy is benefiting the underprivileged classes.

Larayedh said that the government had started revising the compensation system by opting for an efficient targeting policy.

Pointing to the problem of monopoly and the unsuitable legal framework at the energy sector's level, the prime minister specified that efforts will be exerted to liberalise energy production, notably electricity, and to resort to renewable energy.

He said that a steering committee which will draw inspiration from other countries' experiences will be created to find out the adequate mechanisms for the compensation system's revision.

Taking the floor, Secretary of State for Energy and Mines Nidhal Ouerfelli pointed out that energy deficit is expected to reach about 3.05 million toe by the end of 2013, if no measure to rationalise energy consumption is taken.

According to him, energy deficit is due to rise by 9% in primary energy consumption compared with 2012, and by 11% in electricity consumption.

He also explained this by the nature of energy mix adopted in Tunisia entirely based on resort to natural gas in electricity production.

The secretary of State asserted that a new pricing will be applied to great consumers and notably to cemeteries with a total lifting of compensation, and in-depth studies per sector will be conducted to gradually lift the subsidy.

For households, a step-by-step approach will be adopted in matters of energy pricing rise with keeping the same price for 500,000 adherents having a weak consumption, the creation of a second social price and the introduction of new consumption bracket and support some social-professional categories (small artisans).

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