Egypt increases fuel prices to promote economic reform

Source: Xinhua| 2019-07-06 04:36:09|Editor: Wu Qin
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Photo taken on July 5, 2019 shows a gas station in Cairo, Egypt. Egypt on Friday hiked fuel prices by up to 30 percent to meet the terms of a loan deal of 12 billion U.S. dollars and push implementing the economic reform plans, the Ministry of Petroleum said in a statement. (Xinhua/Ahmed Gomaa)

CAIRO, July 5 (Xinhua) -- Egypt on Friday increased fuel prices by up to 30 percent to meet the terms of a loan deal of 12 billion U.S. dollars and push to implement the economic reform plans, a move which experts described as positive and timely.

The price of 92 octane gasoline increased from 6.75 Egyptian pounds (0.41 dollars) to 8 pounds per liter, while the price of 80 octane gas increased from 5.5 pounds to 6.75 pounds per liter.

Moreover, the price of 95 octane gas increased from 7.75 pounds to 9 pounds. The price of a cooking gas cylinder increased by 30 percent to reach 65 pounds.

The new prices went into effect on Friday morning.

This is the fourth time that the government of Egypt has increased fuel prices since austerity measures were announced late 2015.

Egyptian economic expert, Fakhry al-Fiqi, said that it is the proper time to make such a decision as it secures 37 billion Egyptian pounds to the state's treasury.

"Parts of the money will be used to improve the salaries of government employees and retired workers," al-Fiqi, a former advisor with the International Monetary Fund (IMF), told Xinhua.

He added that only the poor and the needy people can benefit from the country's subsidy system now.

Al-Fiqi said that the money will also be used to improve health and education systems in addition to the social protection programs carried out by the government.

"Over the past 60 years, the rich benefited from the country's subsidy system, making them richer, while the poor sink more into poverty," the expert said.

He pointed out that subsidies for gasoline have been fully lifted after Friday's price hike, adding that gasoline prices will be reviewed by the government every three months.

"The prices now may go up or down ... this depends on the international prices of gasoline," he explained.

Subsidies for diesel and cooking gas will continue for two more years, the expert said.

Egypt, the most populous Arab country, has been suffering economic slowdown over the past few years of political instability and relevant security challenges.

The country hopes to increase production and exportation and revive tourism as ways to boost its economy, along with a strict three-year economic reform plan, which started in late 2016, based on austerity measures, fuel and energy subsidy cuts and tax hikes.

Including full local currency floatation, Egypt's reform plan has been encouraged by a 12-billion-dollar loan from the IMF, last third batch of which has been approved in May.

Meanwhile, Egyptian Prime Minister Mostafa Madbouli directed governors to step up campaigns to ensure the availability of different petroleum products, especially butane-gas cylinders and face any attempt by drivers to violate the set fare for mass transportation, microbuses and taxis.

Madbouli, during a meeting with governors via video conference at the cabinet, stressed the necessity of strengthening coordination among governors across the country on the new transportation fare.

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