Egypt implements second fuel price hike in 2025 to curb subsidies, budget deficit

Egypt has implemented a price increase for a range of petroleum products, the second within this year, as part of efforts to reduce subsidies and address budget deficits. The recent adjustments range from 10.5% to 12.9%, following a previous increase of nearly 15% in April.

The Egyptian Ministry of Petroleum announced a freeze on domestic fuel prices for at least one year, citing various developments on local, regional, and global levels.

The Ministry confirmed that refineries would continue to operate at full capacity, aiming to settle debts with partners, enhance production incentives, and minimize import costs.

Diesel prices have increased by 2 Egyptian pounds, now costing 17.50 pounds per liter, up from 15.50 pounds. Gasoline prices have increased by up to 12.7%, with 80 octane gas at 17.75 pounds per liter, 92 octane at 19.25 pounds, and 95 octane at 21 pounds.

Egypt's strategy includes reducing energy subsidies and aligning domestic prices with actual costs by December. The government remains committed to maintaining diesel subsidies, even if it requires raising the prices of other fuels beyond cost to fund these subsidies.

International Monetary Fund Recommendations

The International Monetary Fund has advised the Egyptian government to reduce subsidies on fuel, electricity, and food while expanding social safety nets. This is part of a broader $8 billion loan agreement.

In the second quarter, Egypt reported a current account deficit of $2.2 billion. Petroleum product imports amounted to $500 million, an increase from $400 million the previous year, as per central bank data.

Based on reporting by Africanews.