Egypt raised fuel prices by up to 50 per cent, the oil ministry said on Saturday, under an IMF reform plan that calls for the slashing of state subsidies on some consumer products, reports Reuters.
Oil Minister Tarek El Molla said the price rises will help Egypt save up to 50 billion pounds ($2.8 billion) in allocations for state subsidies in the 2018-19 state budget.
The price hike, the third since Egypt floated the pound currency in November 2016, is expected to add more pressure on Egyptian consumers struggling to make ends meet amid high unemployment and price volatility.
The ministry said that the price for 95 octanes of gasoline was increased to 7.75 Egyptian pounds a litre from 6.60 pounds; 92 octanes was increased to 6.75 pounds a litre from 5 pounds and 80 octanes was raised to 5.50 pounds a litre from 3.65 pounds.
The ministry also raised the price for a canister of gas for Egyptian households to 50 pounds from 30, while a bottle of gas for commercial purposes was raised to 100 pounds from 60.
Molla said the price rise will cut the funds allocated for fuel subsidies to 89 billion pounds from 139 billion pounds.
"Moving fuel prices will help reduce petroleum products consumption by about 5 per cent," Molla said.
Halfway into a three-year, $12 billion International Monetary Fund loan programme signed in late 2016 which is tied to tough austerity measures, Egypt hopes painful reforms such as tax hikes and subsidy cuts will lure back foreign investors and kickstart an economy that crashed after its 2011 Arab Spring uprising.
IMF First Deputy Managing Director David Lipton told government officials in May that Egypt will have to deepen reforms and better encourage private sector growth if it wants to cash in on a wave of global expansion.