Starting Thursday midnight, Egyptians will pay more money at the gas pump. The government decided to raise prices of subsidised fuel just hours after the Central Bank floated the pound. The two steps are the last of a set of austerity measures the government is adopting to get a three-year $12 billion loan from the IMF. The price of 92 octane gasoline rose from LE2.6 to LE3.5 per litre while Octane 80 gasoline witnessed a 46.8 per cent increase to LE2.35 per litre. The price of 95 octane gasoline stayed unchanged at LE6.50 per litre. The price will be left to market forces to determine. As for diesel, which alone eats up 50 per cent of fuel subsidies, the price increased by 30.5 per cent to LE2.35. With subsidised diesel mostly used by the goods and service sectors as fuel for agricultural tractors in villages and minibuses, its price increase will no doubt impact the prices of many goods and services. The price of subsidised butane cylinders used in households for cooking was also raised from LE8 to LE15. The last time Egypt raised the price of fuel was in 2014 when it revealed a plan to phase out energy subsidies over five years. In a press conference on Friday, Oil Minister Tarek Al-Molla said that the move would save the government LE22 billion. Energy subsidies are a heavy burden on the budget, consuming 20 per cent of Egyptian state spending, and does not always target those who need it. Subsidising oil has always been a way to encourage unrationed consumption of energy.
