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Egypt Hikes Petrol Prices

FILE: Cars are seen at a petrol station in downtown Cairo, Egypt. Taken Jun. 19, 2018.
FILE: Cars are seen at a petrol station in downtown Cairo, Egypt. Taken Jun. 19, 2018.

Egypt raised domestic petrol prices early on Thursday, bringing them more in line with global levels but risking further public discontent after a year of rising inflation, a weakening currency and a series of austerity measures.

The country's fuel pricing committee left the diesel price unchanged at 7.25 pounds per liter, the petroleum ministry said in a statement.

But it raised the price of 80-octane petrol by 0.75 Egyptian pounds, 92-octane petrol by 1 pound and 95-octane petrol by 0.75 pounds to 8.75 Egyptian pounds ($0.29), 10.25 and 11.50 per liter, respectively.

Egypt had been bringing fuel prices closer to international levels only for a series of currency devaluations to undermine the process over the past year. The Egyptian pound has fallen by nearly 50% against the dollar over the past 12 months.

Diesel is currently about 50% lower than international prices and 95-octane petrol about 40% lower, said Allen Sandeep of Naeem Brokerage.

EFG Hermes economist Mohamed Abu Basha estimates that the increases could increase headline inflation by 0.2 to 0.3 percentage points. Inflation hit a five-year high of 25.8% in January.

In July 2022 the government announced an increase to diesel's price but said it was still subsidizing the fuel at the rate of about 55 billion Egyptian pounds per year.

Pricing of fuel has been set under quarterly reviews since 2019, taking account of global markets and the exchange rate, in line with previous commitments to the IMF.

Egypt has reaffirmed its commitment to push through fuel price increases to receive a financial support package agreed with the International Monetary Fund (IMF) in December.