Egypt plans to complete its move towards full cost recovery in fuel pricing by the end of 2025, Prime Minister Moustafa Madbouly said on Wednesday, calling the latest price adjustment the final major step in the country's gradual phase-out of fuel subsidies. Egypt's latest fuel price hike marks the final major step in a gradual phase-out of state subsidies, Prime Minister Moustafa Madbouly said on Wednesday, as the government moves towards full cost recovery by end-2025. Speaking at his weekly press conference, Madbouly said the government has been "fully transparent" about the plan, which aims to bring local fuel prices in line with actual production and financing costs after years of heavy state support. "When we issued the previous decision in April, we made it clear that by October there would be one final increase to reach the targeted balance," he said. "This is part of our commitment to achieving full cost recovery by the end of 2025." Madbouly noted that recent public anticipation of higher prices reflected widespread awareness that another adjustment was due. Responding to criticism that the latest increase came despite a fall in global oil prices, Madbouly said Egypt's fuel pricing "is not solely linked to Brent crude," explaining that the government had long kept prices artificially low during crises such as the COVID-19 pandemic and the Russia–Ukraine war. He said the Egyptian General Petroleum Corporation (EGPC) had been forced to shoulder a "massive financial burden" as the state covered the gap through borrowing to protect citizens from global shocks. "The gradual adjustment is essential to restore EGPC's financial stability and ensure it can sustain operations and future investment," Madbouly said. He added that Egypt has resumed paying its dues to foreign energy partners, restoring confidence and encouraging new exploration. Increased domestic output, he said, is helping reduce import costs and strengthen energy security. Madbouly also rejected suggestions that the government should have spread the recent increase across smaller steps, saying that would have "prolonged inflation" and delayed recovery. No Further Increases Expected for a Year Economists and the Central Bank of Egypt (CBE), he said, expect inflation to fall "sharply" starting in 2026, potentially reaching around 8–8.5 per cent in the second half of that year, paving the way for lower interest rates. "With this final adjustment, there will be no need for any further major price increases for at least a year," Madbouly said. "After that, the automatic pricing mechanism will resume, allowing prices to rise or fall slightly depending on global and domestic conditions." He said the government had met with the Federation of Egyptian Chambers of Commerce to urge businesses to avoid unjustified price hikes in response to the fuel increase. "Many sectors are not directly affected by fuel prices," he said. "We expect them to act responsibly in the coming period." Attribution: Amwal Al Ghad English
