The government decided to increase the price of fuel, starting at 8am on Thursday, where the price of a litre of gasoline 92 rose to EGP 5, up from EGP 3.5. The price of gasoline 80 and diesel fuel both increased from EGP 2.35 to EGP 3.65. The price of the cubic metre of gas for cars was lifted from EGP 1.6 to EGP 2, according to Minister of Petroleum Tarek El Molla. Moreover, the price of gasoline 95 increased from EGP 6.25 to EGP 6.6, while the liquefied natural gas (LNG) cylinders increased to EGP 30, up from EGP 15.
The measures are part of the government’s economic reform programme, which includes devaluation of the currency, subsidy cuts, and implementation of the value-added tax to correct the economic path, in parallel with the implementation of social protection measures to protect the lower income groups from the repercussions of the reforms.
The Egyptian General Petroleum Corporation (EGPC) has estimated the fuel subsidies in the coming fiscal year would cost EGP 145bn without rationalisation, but the Ministry of Finance listed the bill for the same item in the 2017/2018 budget at EGP 110.148bn.
This is the second increase in fuel prices in less than a year, where the government raised fuel prices in November. The price of gasoline 80 had been increased by 45%, from EGP 1.6 to EGP 2.35; while the price of gasoline 92 had been increased 35%, from EGP 2.6 to EGP 3.5. The price of diesel fuel had also been lifted from EGP 1.8 to EGP 2.35, marking an increase of 30%. The price of the cubic metre of gas for cars had been increased from EGP 1.1 to EGP 1.6. The price of gasoline 95 had been left unchanged at EGP 6.25.
On 3 November 2016, the Central Bank of Egypt (CBE) decided to liberalise the exchange rate of the pound, leaving its price to be determined according to the supply and demand of the banks. The exchange rate of the pound against the dollar in the official market hiked from EGP 8.88 per dollar to EGP 18.