Al-Sisi defends price hikes and imposes new taxes

Egyptian President Abdel Fattah Al-Sisi has justified his government’s decision to raise fuel prices by saying that the move was necessary to stave off a debt crisis in the country. His statements came as his government announced a rise in sales tax on cigarettes and alcohol as part of its measures to reduce the budget deficit in the new fiscal year.

At a meeting with Egyptian journalists on Sunday, Al-Sisi pointed out that the price increases are not enough, “due to the lack of regulation mechanisms in the Egyptian market.”

The president has raised the sales tax on locally-produced and imported cigarettes by up to 120 per cent. He also raised taxes on alcohol by up to 200 per cent, according to the announcement published by the official gazette on Sunday. On Saturday, fuel prices rose by up to 175 per cent, while the price of natural gas to factories rose by up to 75 per cent.

Prime Minister Ibrahim Mahlab defended the controversial decisions, saying that they are aimed at “fighting poverty and achieving social justice.”

However, the rises have led to popular discontent, especially by taxi drivers, two of whom were seriously injured after being shot at by police during a protest in 10th of Ramadan City. This was not the only demonstration of public anger at the government’s moves. A number of people blocked main roads in Zagazig governorate in protest at the rise in fuel prices and deteriorating living conditions. In Kafr Al-Sheikh, taxi drivers also staged a protest, blocked roads and burned tyres in protest at the latest decisions. In Ismailia, police used tear gas to disperse yet more taxi drivers who staged sit-ins before government buildings in the city.

Political parties and NGOs warned about repercussions from the price rises. The leftist Tagammo Party said it opposes raising prices for the poor. Party chairman Sayed Abdelal said that the increases would lead to the division of the “June 30 coalition” due to their impact on the lives of poor Egyptians. According to Ahmed Darrag, a member of the National Association for Change and a pro-coup public figure, the decisions to raise prices were “rushed” and “ill-considered.”