Impacts of Fuel Subsidies in ANGOLA on the Instability of the Fuel Market in the DRC : A Case Study of the Western Supply Route in DRC

Abstract

In this article, we have studied the unintended effects of petroleum product subsidies in Angola in the development of fraud and smuggling in the Democratic Republic of Congo as well as its consequences on the economic life of the DRC, at least for the track supply from western DRC. The relatively weak porosity and security at the Congolese borders facilitate the development of the illicit trade in petroleum products between Angola and the DRC. This extensive trade is explained by the price disparities on both sides of the borders. exchange rates, differences in energy policies and fiscal variations between the two countries have contributed to creating a noticeable gap between prices in Angola and prices in DRC. There are, of course, no official records to quantify these flows. the direct estimation methods through the counting of vehicles, drums, cans, etc. lack reliability, in particular, due to the insufficient geographical and temporal coverage: the fuel fraud circuits are relatively diversified and characterized by high variability over time which would require permanent observation, too cumbersome to implement.

These fuels are illegally imported from Angola, where they are highly subsidized. This illegal market constitutes a major source of income for young people, generally deprived of a decent job, in the trade of street vendors by generally exhibiting bottles and cans on street corners at prices generally 30% lower than the prices of stations -service official. In addition, smugglers have entered the official distribution network through service stations scattered throughout the country's major cities. the consequences of these fraudulent activities on the economic life of the DRC are incalculable, especially since the politico-military authorities of the DRC are complicit