Egypt's Finance Minister Amr al-Garhy announced Sunday the government is studying the application of new cuts to fuel subsidies. The pressure on the subsidies has been mounting because the increasing price of oil, globally, and the weakening of the Egyptian pound against the US dollar after the flotation of the currency, last November. Garhy added that the government has a new plan targeting energy subsidies, with a view to cut them dramatically over the course of three years, starting this fiscal year 2016/2017. Egypt raised energy prices on November 3, the same day the central bank floated the country's pound currency. These moves were part of Egypt's austerity measures, aimed at securing the US$12 billion IMF loan agreement. The price of 92-octane gasoline was raised by 34.6 percent to 3.5 Egyptian pounds per liter, from 2.6 pounds; while 80-octane gasoline was raised by 46.8 percent to 2.35 pounds per liter, from 1.6 pounds. Diesel fuel was raised to 2.35 pounds per liter, an increase of 30.5 percent from 1.8 pounds. The less commonly used natural gas for vehicles was also raised by 45.5 percent to 1.6 poundsper cubic meter, up from 1.1 pounds. The Finance Minister said Sunday that the percentage of deficit in the first half of the budget for the current fiscal year was 20% lower than expected in the government economic reform program, which it handed to the International Monetary Fund (IMF), and also contained in the financial statement presented to the parliament. Garhy added that the government deal with the IMF was not primarily about borrowing from the fund, but rather, it aimed at restoring confidence in the Egyptian economy. He pointed out that the government presented a program for the IMF in order to restore confidence in the financial, economic and monetary performance which reassured direct and indirect investment circles about the safety of the Egyptian economy. "We will review and evaluate our reform program with the IMF experts every 6 months for the duration of the deal and if any difficulties are found, we will consult with the Fund on how to overcome them," Garhy said. Source: Egypt Independent
