On Thursday, the Egyptian government raised the prices of a wide range of fuel products, just four days before the International Monetary Fund (IMF) is set to conduct its third review of an extended $8 billion loan program for the country.
New Prices:
According to the official gazette, as reported by the Ministry of Petroleum, gasoline prices have been increased by 15%, with the new rates being:
- The price of 80-octane gasoline is now EGP 12.25 ($0.25) per liter.
- The price of 92-octane gasoline is now EGP 13.75 ($0.28) per liter.
- The price of 95-octane gasoline is now EGP 15 ($0.31) per liter.
Diesel, one of the most widely used fuels, saw a larger increase, rising to EGP 11.50 ($0.24) from EGP 10 ($0.21).
This is the second time the government has raised fuel prices since the IMF expanded its loan program for the country by $5 billion in March, with Egypt having committed to reducing fuel subsidies as part of its agreement with the IMF.
Egyptian Prime Minister Mostafa Madbouly stated on Wednesday that fuel prices will gradually increase until December 2025.
Egypt currently spends billions of dollars subsidizing fuel and energy prices for millions of consumers, a policy that has been criticized by government officials and economists, including IMF experts who recently increased Egypt’s loan.
The IMF estimated in April that fuel subsidies in Egypt need to decrease from EGP 331 billion ($6.8 billion) in the 2023-2024 fiscal year to EGP 245 billion ($5.1 billion) in 2024-2025.
Increasing Consumption:
Madbouly mentioned that Egypt cannot afford the increasing consumption and rising global prices. He added that electricity consumption is rising rapidly, reaching about 38.5 gigawatts daily, forcing Egypt to import natural gas for electricity generation and end its load-shedding policy adopted since last year.
Regarding the future, Madbouly said that the electricity deficit is estimated at around 4 gigawatts, with about 2.65 gigawatts expected to be covered by new renewable energy projects scheduled for completion before next summer in collaboration with the private sector.
Delay in the Third Tranche:
The IMF Executive Board has postponed the approval of the third review for Egypt’s $820 million tranche, which was initially scheduled for July 10, to July 29.
IMF spokesperson Julie Kozack said earlier this month that the board had postponed consideration of the third tranche to finalize some policy details, adding that such delays are not uncommon during challenging conditions.
Kozack noted in a routine press briefing that Egypt continues to work under difficult regional circumstances due to Israel’s war on Gaza and the escalating attacks by the Houthis on shipping vessels in the Red Sea, leading to a more than 50% decline in Suez Canal revenues compared to last year.
Kozack refrained from providing additional details but stated that amidst risks and structural challenges, Egypt needs to “continue following economic policies that will ultimately serve the Egyptian people best. I can say that our team is, of course, working closely with the Egyptian authorities.”
