By Njodzeka Kernyuy
Although the US-Israel military offensive in Iran is taking place nearly 2,818 miles from Cameroon, the Central African nation could still feel the impact through potential shifts in global oil prices.
To understand this, one must first examine the economics—or the accounting—behind global oil pricing. But before that, let’s look at the cost of oil within Cameroon.
Currently, a liter of petrol is sold for 840 francs CFA at local pump stations. In the international market, oil is typically measured in barrels.
Since the onset of the conflict in Iran, which has disrupted oil production in the Gulf region and threatened supply routes through the Strait of Hormuz—now nearly shut down—oil prices have skyrocketed to 78 USD (approximately 44,180 FCFA) per barrel.
A standard barrel contains 159 liters of oil. By international standards, this means one liter of petrol costs about 0.4906 USD (or 277 francs CFA).
Cameroon, though an oil-producing nation, imports refined petroleum products from Nigeria, Togo, and the United Arab Emirates, among others. This means that, by trading with these countries, Cameroon aligns with international market prices.
Why Do Cameroonians Buy Petrol at Higher Prices?
While the international market price for a liter of petrol stands at about 277 francs CFA—already elevated due to the Middle East conflict—Cameroonians pay 840 FCFA per liter at the pump.
Based on current figures, this suggests that Cameroon is selling petrol to its citizens at roughly three times the international market rate.
Despite the high costs borne by citizens, the government says it is subsidizing fuel prices to the tune of 15 billion FCFA.
By implication, if the government were to remove these subsidies entirely, as it has suggested, Cameroonians could end up paying more than 1,000 FCFA per liter—over five times the current international price.
This raises a critical question: why would the government purchase oil at 44,180 FCFA per barrel on the international market, subsidize it, and then sell it to citizens at the equivalence of 133,560 FCFA per barrel?
It is important to note that our calculations are based on current international market prices and the current domestic prices in Cameroon, which have remained relatively stable even as the conflict unfolds.
If we consider international prices before the Iran war, Cameroon was likely buying a liter of petrol at around 238 FCFA, compared to the current 277 FCFA.
Meanwhile, the current pump price of 840 FCFA per liter was set in 2024, after the government announced a reduction in fuel subsidies.
How Will the Iran War Affect Cameroon?
Among the countries Cameroon imports oil from is the UAE. More broadly, the global oil market is shaped by the invisible forces of supply and demand.
As oil production facilities in the Persian Gulf shut down and shipping through the Strait of Hormuz slows, a global supply shortage is likely.
This will shift attention to other oil-producing nations—though few can immediately fill the gap left by the crisis in the Middle East.
As a result, prices are expected to rise further, building on the increase from 67 USD to 78 USD per barrel.
By extension, Cameroon—reliant on imports from the international market—will likely raise domestic fuel prices, as it has in the past, often marking them up well above international rates.
