Egypt raises fuel prices by up to 66.6 pct to promote economic reform

Oil Minister Tarek al-Molla said prices for cooking gas increased from 60 Egyptian pounds (3.4 U.S. dollars) to 100 pounds per cylinder for commercial use

Egypt raises fuel prices by up to 66.6 pct to promote economic reform

Oil Minister Tarek al-Molla said prices for cooking gas increased from 60 Egyptian pounds (3.4 U.S. dollars) to 100 pounds per cylinder for commercial use

17 June 2018 Sunday 13:26
Egypt raises fuel prices by up to 66.6 pct to promote economic reform

CAIRO

Egypt on Saturday increased fuel prices by up to 66.6 percent to meet an International Monetary Fund (IMF) loan deal and push the implementation of economic reform plans, the Oil Ministry said in a statement.

Oil Minister Tarek al-Molla said prices for cooking gas increased from 60 Egyptian pounds (3.4 U.S. dollars) to 100 pounds per cylinder for commercial use.

The 92 octane gasoline increased from 5 pounds to 6.75 pounds per liter.

The 80 octane gasoline increased from 3.65 to 5.5 pounds. 

The new prices went into effect Saturday morning, said the statement.  This is the third time the government has increased fuel prices since austerity measures were announced in late 2015.

The oil minister said the price rises will help Egypt save up to 50 billion pounds in allocations for state subsidies in the 2018-2019 public budget.

The total cost of oil product subsidy over the past five years hit 517 billion pounds, al-Molla said. 

The subsidy system was a "negative factor" regarding social justice as several segments of high income benefited from the system, noting that "those who really deserve the subsidy did not benefit from the system," he added. 

Egypt's President Abdel-Fattah al-Sisi, who encouraged the economic reforms, said that the government spends some 18.6 billion dollars a year on subsidies to cover fuel, food, and electricity. 

The tough austerity measures, though praised by economists, add more burdens on poor and middle-class Egyptians. 

Waleed Gaballah, professor of financial and economic jurisdiction at Cairo University, said: "the rise of fuel prices is not a surprise."

"The current reform philosophy in Egypt is based on liberating the prices of commodities and services along with maintaining social protection for the poor class," Gaballah told Xinhua.

The allocations of the fuel subsidy have been decreased in the 2018-2019 state budget, while the prices of gasoline have increased in the world markets, he noted.

"The country is gradually increasing allocations for health and education, so it couldn't bear more expenses for fuel subsidy," the expert said, predicting high inflation rates amid hiking prices of all commodities.

Recently, Egypt raised metro fares by up to 250 percent, drinking water by up to 45 percent and electricity by 26 percent.

The economist added that the country allocated 332 billion pounds for social protections, "but low-income citizens don't feel it because the protection programs are outdated and needed to be developed." 

Egypt has been suffering economic slowdown over the past few years of political instability and relevant security challenges. 

The country hopes to increase production and exportation and to revive tourism as ways to boost its economy, with a strict three-year economic reform plan, which started in late 2016, based on austerity measures, fuel, and energy subsidy cuts and tax hikes.

Including full local currency floatation, Egypt's reform plan has been encouraged by a 12-billion-dollar loan from the IMF, half of which has already been delivered to the most populous Arab country.

Xinhua

Comments
Avatar
Your Name
Post a Comment
Characters Left:
Your comment has been forwarded to the administrator for approval.×
<strong>Warning!</strong> Will constitute a criminal offense, illegal, threatening, offensive, insulting and swearing, derogatory, defamatory, vulgar, pornographic, indecent, personality rights, damaging or similar nature in the nature of all kinds of financial content, legal, criminal and administrative responsibility for the content of the sender member / members are belong.