Algeria's energy earnings are forecast to fall to $26.4 billion next year while foreign exchange reserves will dip to $121 billion after low oil prices cut into the OPEC nation's economy, Finance Minister Abderrahmane Benkhalfa said on Sunday.
The North African state, a major gas supplier to Europe, has already said energy earnings will fall by 50 percent this year to about $34 billion. Oil and gas sales make up 95 percent of its exports and account for 60 percent of the country's budget.
Algeria is considering higher taxes, import duties and a hike in subsidised diesel and electricity prices to help cover its deficit after the slump in crude oil prices eroded its revenues, according to a draft of its 2016 budget.
"We have to be vigilant in the management of our money. We have to control public spending," the minister told the parliament where the draft budget law was presented.
"We have to mobilise new resources. We have planned a reasonable increase in the prices of fuel and electricity to cover production costs," he said.
Domestic prices for energy products are very low by international standards in Algeria, which analysts say is the main reason behind high consumption rates in the country of 40 million people.
The world oil price slide is testing an economic system that relies on energy revenues to pay for a vast range of social subsidies, from public housing to cheap loans and subsidised fuel, which helped Algeria avoid the kind of "Arab Spring" uprisings that erupted in its North African neighbours.
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