Egypt hikes fuel prices as part of austerity measures

Increase is third since the government’s IMF-backed economic reforms in 2016

Egypt yesterday increased fuel prices, the latest in austerity measures as the populous country strives to overhaul its economy.

The hike ranges from 35 per cent to 66.6 per cent, according to a statement from the Oil Ministry.

The increase had been widely anticipated for weeks as part of a government plan that has already seen cuts in state subsidies on electricity and tap water.

The price of low-octane 80 petrol has increased by around 50 per cent to 5.50 Egyptian pounds (Dh1.13) per litre while the high-grade octane 95 petrol increased by 17.4 per cent to 7.75 pounds per litre. The price of the 92 octane petrol has gone up by 35 per cent to 6.75 pounds per litre.

The price of diesel, a commonly used fuel, has increased by about 50 per cent to 5.50 pounds per litre.

The price of cooking butane gas has risen by 66.6 per cent to 50 pounds per cylinder

The increases, announced during the Eid Al Fitr holiday, took immediate effect yesterday.

Subsidy burden

Egypt’s budget for the new fiscal year, starting in July, estimates fuel subsidy at 89 billion pounds, against 110 in the previous budget.

The fuel price hikes are the third since 2016 when Egypt introduced harsh economic reforms that included flotation of the local pound and slashing state subsidies. The steps sent prices of goods and services soaring, but secured the country a $12-billion loan over three years from the International Monetary Fund (IMF).

In the past days, Egyptian media reported on subsidised prices of fuel products and their actual costs, apparently preparing the public for the subsidy cuts.

Last month, the government hiked fares of Cairo metro by up to 250 per cent, a step that triggered rare protests, prompting authorities to beef up security inside and outside the subway stations.

President Abdul Fattah Al Sissi has repeatedly said that reforms are necessary to heal the Egyptian economy battered by the unrest that followed the 2011 uprising.

This month, he admitted that the reforms have been “very harsh” and expressed appreciation to Egyptians for their endurance.

In an attempt to cushion the impact of the latest austerity steps, the parliament last week increased pensions by 15 per cent and approved two bonuses to civil servants, effective as of next month.