Egypt is considering increasing retail fuel prices to 65% of their actual cost next year and eliminating consumer subsidies by 2019, as one part of a deal for a three-year, US$12-billion loan program with the International Monetary Fund, two unnamed officials told Reuters this week.
“What was agreed lately with the IMF delegation in Egypt is cancelling fuel subsidies within three years,” said one official, although a Petroleum Ministry spokesperson said “no decisions have been issued on that matter.”
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Egypt currently sells different grades of gasoline and diesel at 53 to 58% of their actual cost, the news agency reports, but dire economic news may be forcing change. “Struggling to revive its economy after an uprising in 2011 shook investor confidence and drove tourists and foreign investors away, Egypt has been trying to cut spending on subsidies because they eat into its state budget.”
The government hopes to cut fossil subsidies 43% in its 2016/2017 budget.