The North African nation reaffirmed its commitment to push through fuel price increases to receive a financial support package agreed with the International Monetary Fund (IMF) in December.
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.
The country's fuel pricing committee left the diesel price unchanged, the petroleum ministry said in a statement, but 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 litre, respectively. The diesel price was kept at 7.25 pounds per litre. Diesel is now 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. "Gasoline prices were raised, but diesel unchanged. So it should not have a big impact on inflation," Abu Basha said.
A rise in the prices of global commodities including wheat and oil after Russia's invasion of Ukraine last year added to financial pressures on Egypt, driving it to seek a rescue package from the IMF. In July 2022 the government announced a rare increase to the price of diesel but said it was still subsidising 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.
($1 = 30.5800 Egyptian pounds) (Reporting by Hatem Maher and Ahmed Tolba Writing by Aidan Lewis and Patrick Werr Editing by Kim Coghill and David Goodman)
