Egypt raised fuel prices for the fourth time in nearly a year on Friday as part of its ongoing efforts to reduce subsidies in line with an $8-billion loan agreement with the International Monetary Fund (IMF).
In a statement released on Friday, Egypt’s petroleum ministry confirmed the price hike, which affects petrol, diesel, and other energy products, with increases of up to 15 percent. This marks the fourth such rise since March 2024, and the first increase this year.
The price adjustments come shortly after the IMF approved a $1.2 billion disbursement to Cairo, following the fourth review of the country’s economic reform programme.
As part of its loan arrangement, the IMF has consistently urged Egypt to rein in its expensive subsidy system, encourage private investment, transition to a more flexible exchange rate regime, and expand safety nets for the most vulnerable sectors of society.
Diesel, the most widely used fuel for transportation and industry in Egypt, surged by 14.8 percent, increasing from 13.50 Egyptian pounds ($0.30) per litre to 15.50 pounds.
Gasoline prices also rose across all grades. The price of 80-octane fuel increased from 13.75 to 15.75 pounds per litre, 92-octane from 15.25 to 17.25 pounds, and 95-octane from 17 to 19 pounds.
Earlier last year, the IMF extended Egypt’s 2022 loan package from $3 billion to $8 billion to assist the country in managing its economic difficulties amid regional instability.
Egypt, the Arab world’s most populous country, continues to grapple with a mounting external debt, which has quadrupled over the past decade, reaching $155.2 billion by September 2024. A significant portion of this debt has been directed towards large infrastructure projects, including the construction of a new capital east of Cairo.
Additionally, Egypt, which shares a border with the Gaza Strip, has felt the effects of the ongoing conflict between Israel and Hamas. Attacks on Red Sea shipping by Yemen’s Houthi rebels, in a show of solidarity with Palestinians, have severely disrupted traffic through the Suez Canal, a vital global trade route and a key source of foreign currency for Egypt.
Revenues from the Suez Canal dropped by more than 70 percent last year, according to government figures.
