Tunisia raises petrol prices to trim budget gap

TUNIS, Sept 2 Sun Sep 2, 2012 4:30pm BST

TUNIS, Sept 2 (Reuters) - Tunisia, which has forecast a budget deficit of 6.6 percent of GDP this year, is cutting fuel subsidies and raising the price of petrol by 7.2 percent.

The government on Sunday lifted the price of lead-free petrol to 1.470 Tunisian dinars per litre ($0.93) from 1.370 dinars. The last increase, from 1.320 dinars, was announced in December 2010.

The government sets the price of domestic fuel products, in part through a subsidy which this year will be capped at 1.3 billion dinars compared with 1.5 billion in 2011.

Tunisia's central bank raised its key interest rate by 25 basis points to 3.75 per cent on Wednesday to fight rising inflation in the economy, which is gradually recovering from last year's political turmoil which toppled President Zine al-Abidine Ben Ali and triggered the Arab Spring uprisings. (Reporting By Tarek Amara; Editing by David Cowell)