Egyptian subsidies on petroleum products dropped by about 45 per cent in the first half of the current financial year 2020-21, the petroleum minister announced yesterday.
Tarek El-Molla said that the petroleum subsidies had fallen to 8.4 billion Egyptian pounds ($537.8 million) in the first half of the current financial year, compared to 15.25 billion Egyptian pounds ($971.7 million) last financial year.
Since July 2014, fuel prices in Egypt have witnessed five big jumps, starting from 13 per cent to a 305 per cent increase.
After assuming office in 2014, President Abdel Fattah Al-Sisi has been seeking to reduce energy subsidies and supplies in an attempt to decrease a country's worsening budget deficit.
Experts say the rise in fuel prices, as well as the government's other austerity measures, would lead to "resurgence of inflation, deepening in the country's economic recession, and the erosion of the middle class."
In 2016, Egypt adopted an International Monetary Fund (IMF) $12 billion economic reform programme, which included specific measures to improve the country's economic indices and alleviate heavy burdens on the state's budget, including phasing out fuel subsidies. The IMF claimed that such a measure would create "more room in the budget for better-targeted social spending, as well as more investment in health, education, and public infrastructure."
A third of Egyptians live below the poverty line; 6.2 per cent of Egyptians live in extreme poverty.