The Egyptian authorities decided to go ahead with slashing fuel subsidies on Friday, lifting petrol and diesel prices by about 25%. The price of a litre of octane 92 petrol increased to EGP 8, up from EGP 6.75. The price of octane 80 petrol and diesel fuel both increased from EGP 5.50 to EGP 6.75.
Moreover, the price of octane 95 petrol increased from EGP 7.75 to, EGP 9 marking a 17% increase, while liquefied petroleum gas (LPG) cylinders increased by 30% to reach EGP 65, up from EGP 50 for household usage, while commercial LPG reached EGP 130.
Egypt had committed to implementing the automatic price indexation mechanism, linking fuel prices to the international crude oil prices and exchange rates. According to the spokesperson of the Ministry of Petroleum price indexation to be implemented on all fuel in September.
The government’s decision comes in line with promises to reduce fuel subsidies according to the reform plan that was agreed upon with the International Monetary Fund (IMF) in order to secure a $12bn loan.
In January, Egyptian authorities agreed with the IMF, to implement several reform measures, including the implementation of a fuel price indexation mechanism for all fuel products in June, except octane 95 petrol (a decree was already issued in December 2018), liquefied petroleum gas (LPG), and fuel oil used in bakeries and for electricity generation.