Tunisia To Dip Into Its Petroleum Reserves To Make For Supply Shortfall
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Roshan Amiri
- . June 30, 2022
- . Update: July 1, 2022 12:12 am
Tunisia– Its mayhem in Tunisia that is sinking deep into economic despair and is looking forward to some kind of respite through a loan from International Monetary Fund (IMF). The situation now stands that Tunisia will have to dip into its petroleum reserves to meets its urgent energy needs. The rise in global prices of commodities and fuel has not made things easy for the economy in anyway.
In order to avoid its ‘weekly wars’ the government will now have to dip into crucial petroleum reserves. Political turmoil remains the root cause of all the havoc that has been let lose on the country’s economic stability. There is lack of commodities, and fuel is at its lowest.
Debts have been mounting too, with inflation going up the roof. Currently, Tunisia is seeking $4 billion from the IMF, but the latter had put a condition of political stability first. The country has found to even pay back loans over its grain imports. But the World Bank has recently offered an amount for it to repay its wheat and barley imports.
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When it comes to petroleum, the current consumption of such products is said to be estimated at about 90,000 barrels per day, while the production capacity of the Tunisian Company for Refining Industries was 32,000 bpd. The gap is huge; but this is what the reserves are going to look after.
In the past, the political instability and deteriorating economy has led Fitch Ratings to cut Tunisia’s rating in March to “CCC”, from “B-“, seven notches below investment grade and on par with El Salvador and Ethiopia.
The rating downgrade denotes a very high level of default risk relative to other issuers or obligations, mainly due to heightened fiscal and external liquidity threats. This is one reason why IMF is now seeking more political stability before it can delve into its own money reserves and lend to Tunisia.
