The Egyptian government has raised fuel prices for the second time in less than a year to fulfill obligations laid out by the International Monetary Fund (IMF) under a loan deal.
Egypt’s Petroleum Minister Tarek el-Molla said Thursday that three main types of fuel used in Egypt saw an increase in the price by up to 50 percent.
Egyptians now have to buy 92-octane gasoline for 5 Egyptian pounds ($0.2767) per liter while Diesel and 80-octane — the most commonly used fuel categories — would be offered for 3.65 pounds for each liter.
Reports said the price of cooking gas cylinders, used by Egyptians in poorer areas, was also increased by 100 percent to reach 30 pounds ($1.66).
Molla said the increases would save Egypt around 35 billion Egyptian pounds (around two billion USD) in subsidies for petroleum products in 2017-2018.
The new hike in fuel prices is part of a three-year agreement with the IMF, which seeks to revive Egypt’s economy through lifting subsidies, raising taxes and loosening capital controls. Egypt has to meet the terms of the deal to secure a $12 billion IMF loan deal. It will receive a second installment of $1.25 billion of the loan within the coming few weeks.
Prices had been increased for the first time in November by as much as 46 percent when Egypt introduced a first batch of reform measures under the IMF deal. That came after the country’s central bank floated the pound.
Cairo has defended the reforms as necessary for reviving the economy that is believed to have been heavily reliant on state subsidies. However, many expect the hikes in fuel prices and the floating of the pound, which has lost half its value since November, could further erode the public standing of President Abdel Fattah el-Sisi. The former army general has already faced discontent over his way of dealing with dissent and a controversial decision to hand over the sovereignty of two islands in the Red Sea to Saudi Arabia.
Sisi came to power in 2014 nearly a year after he led a coup against Egypt’s first-democratically President Mohamed Morsi.