Egypt raises fuel prices as part of subsidy reform

The Egyptian government on Thursday raised gasoline and diesel prices with immediate effect as the government moves ahead with reform plans to cut subsidies and trim the budget deficit.

According to a cabinet statement in Ahram Online Thursday, the price for a liter of 80 octane gasoline or diesel rose to 3.65 pounds (20 cents) from 2.35 pounds, while 92 octane fuel increased to 5 pounds from 3.5 pounds per liter.

The price of gas for vehicles surged by 25 percent to 2 pounds per cubic meter from 1.60 pounds per cubic meter, while the price of cooking gas cylinders doubled to 30 Egyptian pounds from 15 pounds per cylinder.

The move comes as part of the government's five-year plan to gradually scrap its fuel subsidy bill in the new budget. The plan is to decrease subsidies from EGP 145 billion this fiscal year (which ends in June) to EGP 110 billion in the 2017/18 fiscal year, according to Ahram.

In a statement to Reuters, Egypt’s Petroleum Minister Tarek El Molla said the new cuts in petroleum products’ subsidies are expected to save around 35 billion pounds for fiscal budget 2017-2018.

Egypt’s central bank floated the currency last November, as part of economic reforms that came in the International Monetary Fund loan agreement, which also included fuel and other subsidy cuts.