Senegal hikes fuel prices by 7% to curb soaring subsidy bill

Senegal announced a 7% increase in fuel prices to keep its subsidy spending within the allocated budget, after oil prices rose above the $85 level used for the original estimate. The adjustment underscores Africa’s sensitivity to external energy disruptions, highlighted by the recent Iran war-related shock. Although some countries are seeking to lessen reliance on Middle Eastern oil—such as Africa’s richest man planning a large refinery in East Africa—the continent continues to import about 70% of its fuel needs.

Nations like Ghana, Malawi, Nigeria and Tanzania have already experienced similar price rises. Higher energy costs are forcing African central banks to maintain elevated interest rates, which dampens growth and raises borrowing costs, while S&P warns that rising food prices could become a delayed source of inflation.