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Egypt bumps fuel prices up to 78% to deal with crushing deficit

Canadian Press, The Canadian Press
4 Comments| July 5, 2014


CAIRO, Egypt _ Egypt's government raised the prices of fuel by up to 78 per cent starting Saturday, following on a promise to cut subsidies that eat up nearly a quarter of the state budget, the official news agency reported.

The price hikes, in effect as of Friday midnight, follow an increase in electricity prices that were put in effect at the start of July.

The Cabinet this week amended the government's budget to reduce a staggering deficit.

Newly elected President Abdel-Fattah el-Sissi, elected to office last month, has said he will need to tackle the tough issue and asked every Egyptian to be ready to sacrifice to help the country's battered economy after three years of turmoil.

The former military chief also asked the government to amend the largest budget in Egypt's history, at $115 billion, to reduce a budget deficit from 12 to 10 per cent.

The amended budget featured a $6 billion reduction in the energy subsidy bill, government officials said.

The fuel price rise was highest for 80 octane gasoline, used mostly by old vehicles that still fill Egyptian streets, with the price jumping 78 per cent to 22 cents per litre. Diesel fuel, used by most of Egypt's public transport and trucks, increased 64 per cent to 25 cents a litre. The 92 octane increased by 40 per cent to 37 cents a litre.

Energy and food subsidies eat up about a quarter of Egypt's state budget. The country's successive leaders have balked at reducing them because half of the country's 85 million people live at or below the poverty line of $2 a day and rely on government subsidies of wheat and fuel for survival.

Even though government officials had said over the last week that fuel subsidies would be reduced, the new price scheme was announced only a few hours before the decision was implemented. The decision caused a rush on gas stations, and lines formed outside them before midnight.


Tags: ETF

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materialsgirl
Mikael; What do you think the price of gasoline should be in Egypt? Explain why (briefly)
2 stars
July 5, 2014
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iamontheinside
High octane @ 37 cents a liter? Now I'm really feeling gouged at the pump! I wonder which benchmark they use. Obviously not West Texas or North Seas Brent. And where does OPEC fit in?
1.5 stars
July 5, 2014
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Mikael
Another nation crushed under the heel of The Money Masters - the criminal psychopaths atop the international banking cartel, whose corrupt ponzi-scam has every individual and nation caught in a deadly anti-human www.webofdebt.com. Also www.themoneymasters.com , or google "The Money Masters" for a critically important (free on-line) documentary on why this world is fugged while the Psychos rule the roost ...
2.5 stars
July 5, 2014
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BaystreetBenny
Watch RPX Just Raised $3M @ $0.055 a few weeks ago....Traded Million @ $0.015..Crazy ! Drills programs Underway....Drills Turning on Massive VMS property Near KIDD Mine Area Near Timmins ONT
1.5 stars
July 6, 2014
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