Egypt to cut fuel subsidies by 15% says minister

Egypt’s petroleum minister yesterday announced that his country would reduce fuel subsidies by 15 per cent.

Tarek El-Molla told Reuters that Egypt’s fuel subsidy bill amounted to 43.5 billion Egyptian pounds ($2.43 billion) during the first half of the current financial year, down from 51 billion Egyptian pounds ($2.85 billion) during the same period the year before.

Egypt’s financial year begins in early July and lasts until the end of June of the following year.

The Egyptian government earlier announced that it had planned for a 90 billion Egyptian pounds ($5 billion) fuel subsidy budget for the financial year 2018-19. It recently announced that it would cut subsidies on petroleum products by 26 per cent.

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In September, El-Molla said that the government was planning to “completely” cut fuel subsidies after it had been reduced twice in less than a year.

Since the incumbent President Abdel Fattah Al-Sisi’s took power in May 2014, Egypt has embarked on a multi-sectoral nation-wide reform programme in an attempt to revive an economy that battered by political upheaval after the 2011 revolution and to ease a US dollar shortage that has crippled import activity and hampered recovery.

In November 2015, Egypt won a three-year $12 billion IMF loan, which aimed at reviving the country’s struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor. Since then, Energy subsidies were cut, taxes increased, the Egyptian pound was allowed to float and a set of laws was introduced to facilitate business.