Sunday 17, June 2018 by Jessica Combes

Egypt hikes fuel prices in IMF-backed austerity drive

 

Egypt has raised gasoline prices by up to 50 per cent

Egypt has raised its gasoline prices by up to 50 per cent, according to a statement by the Oil Ministry on Saturday. The sharp increase is in line with an IMF reform plan that called for austerity measures which have made life more challenging for Egyptians.

The price hike, the third since Egypt floated the pound in November 2016, is expected to pile more pressure on Egyptian consumers struggling to make ends meet amid high unemployment and rising prices, and Oil Minister Tarek El Molla said the price rises would help Egypt save up to EGP50 billion ($2.8 billion) in allocations for state subsidies in the 2018-19 state budget, according to Reuters report.

The price for 95 Octane gasoline has increased to EGP7.75 per litre, up from EGP6.60; 92 octane is gone up from EGP5 to EGP6.75 per litre, and 80 octane is EGP5.50 from EGP3.65 per litre.

Accordingly, taxi fares are set to increase by 10 to 20 per cent, a cabinet statement said.

The price for a canister of gas for Egyptian households almost doubled from EGP30 to EGP50, while a bottle of gas for commercial purposes went up to EGP100 from EGP60.

Prime Minister Mustafa Madbouly said that bread prices would not be affected by a 50.7 per cent rise in diesel prices; the Ministry of supply would carry the extra cost for bakeries to ensure that the price of Egypt's main staple remains unchanged.

Subsidised bread is a staple for millions of poor Egyptians and Reuters dai the country's leaders are keen to keep supplies flowing for fear of unrest, but the price hikes have left many Egyptians angry.

Halfway into a three-year, $12 billion IMF loan programme signed in 2016 which is tied to the austerity measures, Egypt hopes the painful reforms will lure back investors and kick start an economy that crashed after its 2011 Arab Spring uprising.

IMF First Deputy Managing Director David Lipton told government officials in may that Egypt would have to deepen reforms and better encourage private secotr growth if it wants to benefit from global expansion, said Reuters.

 

 

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