In Algeria, following the low prices of oil, which has cut into the country’s economy, its energy incomes have been estimated to drop to $26.4 billion,while its foreign exchange reserves will drop to $121 billion in 2016, Finance Minister Abderrahmane Benkhalfa (photo) revealed.

According to a draft of the country’s 2016 budget, Algeria plans higher taxes, import duties as well as an increase in subsidized diesel and electricity prices to cover its deficit after the decline in the prices of oil globally, gobbled its revenues.

“We have to be vigilant in the management of our money. We have to control public spending. We have to mobilized new resources. We have planned a reasonable increase in the prices of fuel and electricity to cover production costs,” Benkalfa said.

By international standards, domestic prices for energy products are very low in Algeria.Benkhalfa stated that the total expenditure on subsidies which includes food, transport, housing and public health coverage, is to rise by 7.5 %in 2016.

The draft is, however, subjected to the approval of the parliament. Meanwhile, concerns have been raised by some lawmakers regarding government’s plan to increase the price of subsidized fuels.

“This is a dangerous law. The government wants its citizens to pay for deficits from their own pockets. The price increases will push inflation up”, Lakhdar Benkhellaf, a deputy for the opposition Islamist party Justice and Development Front said.

The country is also looking to attract more foreign investments in order to boost oil and gas production, which has been on stand still for the past three years.

Following a 40.7 % decrease in energy incomes, Algeria recorded a trade deficit of $10.825 billion in the first 10 months of 2015 contrary to a $4.29 billion excess a year earlier, customs data revealed.

In June 2014, foreign exchange reserves were at $193 billion and dropped to $159 billion in June 2015.The Finance Minister is confident that foreign exchange reserves will fall to $151 billion by the end of 2015 before attaining $121 billion in December next year, Reuters reports.