Egypt hikes domestic fuel prices in latest round of subsidy cuts

Cairo Egypt introduced its latest round of fuel subsidy cuts on Friday, raising domestic prices by between 16% and 30% as it nears the end of an IMF-backed economic reform programme.

Starting at 9 a.m. (0700 GMT), the price of widely used 92 octane grade petrol rose by 18.5% to 8 pounds ($0.4825) a litre, while lower quality 80 octane rose by 22.7% to 6.75 pounds ($0.4071) a litre, the petroleum ministry said in a statement.

Higher grade 95 octane fuel rose by 16.1% to 9 Egyptian pounds ($0.5428) a litre, and diesel rose by 22.7% to 6.75 pounds per litre. The price of cooking gas cylinders rose by 30% to 65 pounds for domestic use and 130 pounds for commercial use.

Scaling back fuel subsidies was a key plank of a three-year $12 billion economic reform package signed with the IMF in November 2016. Energy subsidies had eaten up as much as 20 per cent of the government’s budget in recent years.

The reforms also included a sharp devaluation of the Egyptian pound and led to rapid inflation that later cooled.

They have improved the country’s macro economic indicators but have increased the financial strain for tens of millions of Egyptians, many of whom live under the poverty line