Egypt has raised fuel prices by up to 78 per cent as part of a move to cut the considerable state energy subsidies, which came into effect on Saturday
Brought in under the newly-elected President Abdel Fattah al-Sisi, the price increase is an attempt to stabilise the economy after more than three years of political unrest.
Angus Blair, chairman of business and economic forecasting think-tank Signet, told Reuters, “An increase in fuel prices has been expected and while it is likely that there will be some inflationary repercussions, a rise in prices to a market price is necessary.”
Speaking to the private television channel Sada al-Balad, Egypt’s supplies minister Khaled Hanafi confirmed that the price for octane gasoline would increase by 40 per cent, from approximately EGP1.85 (US$0.25) per litre to EGP2.60 (US$0.36), while diesel would rise 63 per cent to EGP1.80 (US$0.25) per litre.
Additionally, 80 octane gasoline is reported to rise by 78 per cent to EGP1.60 (US$0.22) per litre.
It was recently revealed that the North African country was on track to spend approximately US$9.8bn more than budget on its energy subsidies for the fiscal year ending 30 June 2014.
Furthermore Egypt has experienced numerous power blackouts across the country, which will be expected to continue throughout the summer months when energy consumption is at its highest.
This follows news that the country’s electricity prices have experienced similar increases in order to tackle the energy subsidies. Reports claim electricity prices are expected to almost double in five years.
