Egypt has increased prices on a wide range of fuel products, according to an announcement in the official gazette on Friday, progressing with a commitment made to the International Monetary Fund (IMF) over a year ago under a $3 billion financial support package.
In a letter of intent signed in November 2022, Egypt pledged to permit most fuel product prices to rise, aligning domestic prices more closely with those in international energy markets. Additionally, it committed to compensating for a slowdown in such increases over the previous year. However, it only raised prices once, in March 2023.
The IMF agreement lapsed last year after Egypt failed to implement the promised price rises and other obligations, including allowing its currency to fluctuate according to market dynamics, promptly divesting state assets, and diminishing the government’s economic intervention.
This month, the IMF expanded the financial support agreement to $8 billion to assist Egypt in mitigating economic disruptions caused by the conflict in Gaza. This followed the government’s renewed commitment to reform measures, including a significant currency devaluation. However, the IMF board has yet to convene to ratify the new agreement.
According to the petroleum ministry cited in the official gazette, 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 IMF has contended that subsidized petrol prices primarily benefit the affluent, disadvantaging the majority of the populace, particularly those without access to vehicles.
The pricing committee also elevated the price of diesel to 10.00 pounds from 8.25 pounds and increased the price of butane cooking gas to 100 pounds per cylinder from 75 pounds, as per the gazette, a publication dedicated to government proclamations and decisions.
Furthermore, the committee set the price of fuel oil at 7,500 pounds per tonne but maintained prices at 1,500 pounds per tonne for food industries and at 2,500 pounds per tonne for power plants.
Inflation soared to record levels in 2023, with prices escalating by 33.7%.