(Bloomberg) -- Algeria's cabinet approved a new energy law aimed at boosting investment in the vital hydrocarbon sector, but which has become the latest target for demonstrators demanding the purging of the OPEC member's old regime.
Hours before its passing, hundreds of protesters had massed outside parliament, saying the interim government lacked the authority to approve the legislation and was intent on passing it only to win the backing of Western nations as it faces near daily protests. Authorities also approved the 2020 budget, the private Ennehar TV station reported.
The draft energy bill was seen by many as another attempt by the country's caretaker government to impose its will after authorities unilaterally scheduled presidential elections in December. Protesters rejected the push for the ballot, saying it was an attempt by the country's powerful elite to ensure their grip on power even after the mass demonstrations that led to the resignation of President Abdelaziz Bouteflika in April.
Leaner Days Ahead Under New Algeria Budget as Protests Play Out
Ahead of its passing, Mustapha Hanifi, head of the Energy Ministry's hydrocarbon department, said earlier Sunday that the current law had “shown its limits.” The choice before authorities, he said, was to decide between maintaining high taxes or cutting them to lure investors. Deeper pockets were needed than those available to the state-run energy giant, Sonatrach, he said.
Algeria relies on oil and gas for the lion's share of its foreign revenue -- money that had been critical to sustaining a system of heavy subsidies that, in turn, helped appease the population. But volatility in the oil market over the past few years forced a sharp draw-down in the country's foreign currency reserves.
To contact the reporter on this story: Salah Slimani in Cairo at sslimani2@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Tarek El-Tablawy, Michael Gunn
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