Fuel Prices Hiked for Third Time Since 2016

Fuel Prices Hiked for Third Time Since 2016

The government announced new fuel price increases on June 16, the third time prices have risen since the country floated the Egyptian pound in November 2016, Egypt Oil & Gas reports.

The new price of 95-octane benzene is EGP 7.75 per liter, up from EGP 6.60, while 92-octane benzene increased to EGP 6.75 from EGP 5. The largest price increase was applied to 80-octane benzene, which has risen to EGP 5.50 from EGP 3.65.

The price of gas cylinders increased from EGP 30 to EGP 50 for households, and from EGP 60 to EGP 100 for commercial uses.

Minister of petroleum Tarek El Molla said in a press statement that the reforms aim to allocate the subsidies to people who need them. Customers now pay between 75% and 80% of the total fuel costs while the government subsidizes the remaining 20-25%, El Molla said.

The cuts to fuel subsidies is a key part of the government’s strategy to lower the country’s budget deficit, an important condition of the $12-billion IMF loan agreed in November 2016. The IMF will disburse the next $2-billion tranche at the end of July 2018, Egyptian finance minister, Mohamed Maait, announced.

The first price hike came in November 2016, a few days before signing the IMF agreement. This was followed by a 50% increase in June 2017 as the government continued to cut subsidies.

Egypt plans to spend EGP 89 billion on fuel subsidies during fiscal year 2018/19, which will start on July 1. El Molla said however that this number may increase due to rising crude prices.

There have been conflicting statements about the government’s long-term plans for lifting subsidies. El Molla said in March 2017 that the government will gradually reduce fuel subsidies until state finances are stabilized in 2019, Enterprise reported. However, state-owned Al-Ahram newspaper wrote in June 2017 that subsidies will be eliminated completely by 2022.


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