Egypt raised the prices of a wide range of fuel products today as it seeks to keep to a year-old promise it made to the International Monetary Fund (IMF) as part of a $3bn financial agreement.
According to Reuters, Egypt made this promise in November 2022 when it signed a letter of intent saying it would allow most fuel product prices to rise to bring domestic prices more in line with those in the international energy market.
It also promised to make up for a slowdown in such increases over the previous year. But it subsequently hiked prices only once, in March 2023.
The official gazette, an Egyptian Newspaper focused on government decisions and announcements citing the petroleum ministry, said a quarterly pricing committee raised petrol prices on Friday by 1.00 Egyptian pound ($0.02) per litre, with 80 octane rising to 11.00 pounds, 92 octane to 12.50 pounds and 95 octane to 13.50 pounds.
The pricing committee raised the price of diesel to 10.00 pounds from 8.25 pounds and the price of butane cooking gas to 100 pounds per cylinder from 75 pounds,
The committee also set the price of fuel oil at 7,500 pounds per tonne but left prices unchanged at 1,500 pounds per tonne for food industries and at 2,500 pounds per tonne for power plants.
The IMF argued that subsidized petrol prices mainly help the rich at the expense of the poor, who do not even own cars.
The IMF this month expanded its financial support agreement to $8bn to help Egypt overcome difficulties in its economy caused by the War in Gaza and a sharp devaluation of its currency, the aftermath of the government renewing its commitment to reform measures.
Inflation in Egypt peaked in 2023, with prices rising by 33.7%. The Egyptian pound is currently worth 46.6000 pounds to a dollar in the market.
What To Know
- Egypt’s agreement with the IMF fell into dormancy last year when the North African country did not follow through on price rises and other commitments including allowing its currency to be determined by market forces, selling state assets, and reducing the government’s role in the economy.
- Egypt’s economic woes are on the increase as many as 60% of Egypt’s 106 million citizens are estimated to be below or close to the poverty line.
- Egypt has recently received various aid and stimulus packages from the European Union, the World Bank, and the UAE as the struggle to stabilize its economy continues.
