04 November 2016, Cairo — The government issued a decision to raise energy prices by 30-47 percent, affecting the prices of fuel, diesel, butane gas and natural gas used for vehicles as of midnight on Thursday.
According to the Petroleum Ministry, the prices for 80 octane gasoline increased to reach EGP 2.35 per litre instead of EGP 1.6, and 92 octane gasoline increased to EGP 3.5 instead of 2.6 per litre, while diesel increased to EGP 2.35 per litre from EGP 1.8 – an increase of 30.5 percent.
Meanwhile, natural gas increased to EGP 1.6 per cubic metre instead of only EGP 1.1.
The government kept 95 octane stable at EGP 6.25 per litre, with no subsidies.
The ministry also raised the prices of butane gas for homes from EGP 8 to EGP 15, and for commercial consumption from EGP 16 to EGP 30.
This step comes a few hours after the Central Bank of Egypt (CBE) decided to float the Egyptian pound.
Egypt is currently striving to acquire a loan from the International Monetary Fund (IMF) worth $12 billion, conditional on implementing an economic reform programme.
This includes adding the Value Added Tax and floating its currency, in addition to cutting subsidies on fuel.
The government announced in 2014 adopting a strategy to cut fuel subsidies that already eats up 20 percent of the state budget. The strategy aims at providing smart prepaid cards for fuel to avoid the smuggling of petroleum products.
The strategy is also aimed at gradually increasing the fuel prices and removing subsidies in the coming three to five years.
The government started proceeding with those steps during the 2014/2015 fiscal year where they raised the fuel prices and electricity. This raise had lessened the burden of fuel subsidies from the state budget down to EGP 74 billion instead of EGP 104 billion in the previous fiscal year.
The government allocated EGP 61.7 billion for energy subsidies in the state budget for the fiscal year 2015-2016 and EGP 35 billion during the current 2016-2017 budget.