CAIRO, (Reuters) – Egypt was set to raise mainstream fuel prices by up to 78 percent from midnight, an Oil Ministry source told Reuters, in a long-awaited step to cut energy subsidies to ease the burden on its swelling budget deficit.
Food and energy subsidies traditionally eat up a quarter of state spending. The government is cutting subsidies in hopes of reviving an economy battered by more than three years of political turmoil.
Successive governments have failed to curb energy product subsidies, fearing backlash from a public used to cheap fuel.
“The increase will start being implemented by midnight,” the source said.
The source said the price of 92 octane gasoline would be 2.60 Egyptian pounds (36 cents) per litre, up 40 percent from its current price of 1.85 pounds, while 80 octane gasoline would rise to 1.60 pounds per litre, up 78 percent.
Diesel will rise to 1.80 pounds per litre, an increase of 63 percent, while the less commonly used natural gas for vehicles will rise by 175 percent to 1.10 pounds per cubic metre.
Khaled Hanafi, Egypt’s supplies minister, confirmed the cuts on private television channel Sada al-Balad, saying the state will cancel 90 octane gasoline and the price for 92 octane gasoline would be 2.60 pounds while the price for 95 octane gasoline would rise to 6.25 pounds. He also confirmed that diesel prices would rise to 1.80 pounds.
Newly elected president Abdel Fattah al-Sisi has already raised electricity prices in efforts to reform energy subsidies, one of a range of politically sensitive subsidies that also cover transport, food and agriculture.
