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The government has raised the price of diesel by EGP 1.00 to EGP 8.25 per liter, the Oil Ministry saidon Wednesday. The decision came into effect on Thursday at 2am CLT.
The price of diesel has now risen 22% since last July, when the government increased theprice for the first time in years following the commodities shock triggered by the war in Ukraine.
The rationale: The price to the government of diesel has risen to EGP 12.25 per liter on the back of higher prices in the global market as well as the EGP devaluation, the Oil Ministry said in a separate statement. The hike will reduce the government’s expenditure on diesel subsidies to an average of EGP 64 bn per year from EGP 80 bn.
Expect more inflation: Diesel is the main fuel used by vehicles that transport goods and rawmaterials around the country, as well as modes of public transport.
Public transport fares — including taxis, microbuses and buses — increased around 10% nationwide on the news, marking their second fare hike in less than a year when they rose following last July’s diesel price hike. Each governorate has released its updated fares, according to the Local Development Ministry.
Gasoline prices were left unchanged: Having already hiked the prices of gasoline(petrol) in March, the committee decided to keep the price of 95-octane at EGP 11.50 per liter, 92-octane at EGP 10.25 per liter, and 80-octane at EGP 8.75 per liter. The price at which mazut (fuel oil) is sold was also kept unchanged.
Bread prices to remain as is: The Madbouly government will subsidize the higher cost of bread caused by the price hike. “We are reassuring citizens that the price of the subsidized bread loaf will remain unchanged and so will its weight,” Abdallah Ghorab, head of the bakery division at the Egyptian Federation of Chambers of Commerce (Fedcoc), told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 3:51).
Producers won’t pass on higher fuel costs? That’s according to Fedcoc secretary-general, Alaa Ezz, who in an interview on Kelma Akhira last night said that producers will shoulder the impact of higher diesel prices, which he estimated would raise commodity prices by 0.2% (watch, runtime: 4:07).
Remember: The government has committed to changing local fuel prices in line with movements in the global markets under its USD 3 bn loan agreementwith the IMF.
