Oil producer Algeria agreed to slash its public spending after a fall in hydrocarbon prices triggered by the coronavirus pandemic, which has shattered sales forecasts for the current year, the country’s presidency said in a statement on Sunday.
The decision came after a cabinet meeting when the nation declared that the operational budget would be cut by 30%, however, the new budget was not specified.
After the emergence of the deadly coronavirus outbreak, which created global crises with a death toll of more than 14,700, the worldwide decline in oil demand resulted in a standoff between major oil producers Russia and Saudi Arabia.
Amid the current turmoil, oil prices fell to as low as $22.50 at one point but the 2020 Algerian budget had been based on oil prices of $60 per barrel.
According to the statement, Algeria's state oil giant Sonatrach would be required to cut operating and capital spending by half from the $14 billion previously set to $7 billion to preserve the nation's foreign currency reserves.
Yet the government did not cut the salary of civil servants, and said it hopes the health or education budgets would not have to be cut.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr