Egypt’s Cabinet decided to cut fuel subsidies in order to ease the budget deficit. The decision led to an increase in benzene and diesel prices. Egyptian Prime Minister, Sherif Ismail, said that economic reform decisions on the part of the state could no longer be delayed, according to Al Ahram.
Ismail’s statement came during a press conference. He also said that the new economic decisions aligned with government efforts to redirect subsidies from energy towards measures that would protect low-income citizens.
Meanwhile, Minister of Petroleum, Tarek El Molla, told Reuters that the price of 92-octane gasoline rose to EGP 5 from EGP 3.5 per litre and diesel and 80-octane, the most commonly used fuel category, increased from EGP 2.35 per litre to be EGP 3.65 per litre.
Sherif said, “Without these decisions the cost of fuel subsidies approaches EGP 150b, a cost the state cannot bear.” The Prime Minister added, “Most of the time there has been no justice in the distribution of subsidies. What we are doing now is correcting the allocation of subsidies as part of the country’s economic reform program.”
Accordingly, El Molla said that the total amount of subsidies for petroleum products in 2017/2018 will decrease to EGP 110b.
The government also increased the price of cooking gas cylinders from EGP 15 to EGP 30 per cylinder.