Cairo: Sweltering in the summer heat, Sobhi Mahmoud, a government employee, fumes at a bus stop while waiting for a public bus to take him to his workplace in Shubra Al Khaima, north of the Egyptian capital.
“I used to take the [privately operated] microbus for this daily journey and pay two pounds (Dh1.05) each time. But after the recent increases in fuel prices, the fare of the same journey has risen to 3.5 pounds, which means I have to fork out seven pounds every day,” said Mahmoud, a father of five. “I can’t afford this increase. So I decided to use the state-owned bus, which costs one pound, but does not come punctually. How can poor people like me live with the crazy price rises caused by increasing petrol prices?”
Mahmoud’s view echoes the angry reaction of many Egyptians to the government’s decision earlier this week to increase prices of petrol, diesel and natural gas used for vehicles by up to 78 per cent. The move was made few days after the government had increased electricity prices by around 30 per cent under a plan to phase out state subsidies on electricity in five years.
Drivers of taxis and trucks held several protests and blocked some roads, saying the increases will slash their earnings.
Prime Minister Ebrahim Mahlab said the measures would cut energy subsidies by 51 billion Egyptian pounds (Dh26.8 billion) and help curb a swelling budget deficit. Energy subsidy accounted for one fifth of Egypt’s budget in the 2013/2014 fiscal year when deficit reached 12 per cent of gross domestic product. The new budget, which took effect on July 1, targets a 10 per cent deficit.
The measures were introduced less than one month after President Abdul Fattah Al Sissi took office on an electoral platform based on rejuvenating the economy, battered by more than three years of turbulence.
Al Sissi defended the measures as necessary to reform the economy. However, they drew criticism from some politicians, including allies of the former defence minister.
“These steps place new burdens on the poor and the people living on limited income, who were suffering even before the latest increases were applied,” said Nabil Zaki, the spokesman for the leftist Tajammu Party.
“These measures mark a relapse to policies whereby the government repays its debts from the pockets of the poor. The current government should have taken other measures to control the budget deficit such as imposing taxes on luxury property and combating corruption. Such steps would bring the state billions of pounds,” added Zaki whose party staunchly backed the Al Sissi-led army’s ouster of Islamist president Mohammad Mursi last year.
“The way the government is acting comes to the benefit of the businessmen at the expense of the poor.”
A pro-Mursi alliance has condemned the measures as a “collective punishment of the people” and urged Egyptians to stage mass protests to “topple the wanton coup authorities”. The Muslim Brotherhood-led alliance calls Mursi’s removal as a coup and refuses to recognise Al Sissi’s election as president.
Opposition leader Hamdeen Sabahi, who competed against Al Sissi in the May presidential polls, slammed the austerity measures. “We can’t punish citizens for officials’ corruption and then ask them to fill the plundered state coffers with money,” he wrote on his Facebook page.
Other politicians disagree.
“It was necessary for the government to start grappling with the energy subsidy,” Mohammad Al Sadat, the head of the liberal Reform and Development said. “These decisions despite being tough and conducive to negative reactions are like a painful-but-unavoidable medicine,” he told state-run newspaper Al Ahram.
The government said the fuel price rises would result in “slight increases” in prices of public transportation and food, vowing to “strike with an iron fist” against manipulators. In a bid to allay the public anger, the government has kept the fares of state-run buses and trains unchanged.
