CAIRO (AP) – The Egyptian government raised fuel prices yesterday in a move that is bound to exacerbate inflationary pressures on an already-struggling population.
The new prices were announced on the Cabinet’s Facebook page and came into effect yesterday morning. The price of diesel, the main fuel for transport of people and goods, rose from EGP8.5 to EGP10 per litre.
Egypt, a net importer of energy, increased the price of 95 octane gasoline to EGP13.5 per litre from EGP12.5.
The government said the hikes resulted from the increased cost of importing energy because of the depreciation of the local currency and the global surge in energy prices following the turmoil in the Red Sea.
On March 6, Egypt’s central bank announced the adoption of a market-based exchange rate after nearly a year of defending an over-valued local currency, which inadvertently invigorated a parallel market. The pound’s official rate fell from nearly 31 to 51 per United States dollar before appreciating by nearly 10 per cent in recent weeks as the banking sector began receiving large inflows of foreign currency, according to the government.
The government also increased the cost of widely used butane gas cylinders from EGP75 to EGP100. Last year, a Cabinet member said Egyptians consume around 800,000 butane cylinders a day, 50 per cent of which are imported.
The fuel price hikes are expected to further affect consumer purchasing power and inflation rates. Last month, the annual urban inflation rate jumped to 35.7 per cent from 29.8 per cent in January.
