© Reuters. File photo: A family is seen on their motorbike at a CO-OP petrol station in Cairo, Egypt, April 2, 2020. REUTERS/Mohamed Abd El Ghany/File photo
CAIRO (Reuters) – Egypt raised prices on a wide range of fuel products on Friday, the official gazette said, pressing ahead with a promise it made to the International Monetary Fund (IMF) more than a year ago as part of a $3 billion financial support agreement.
In a letter of intent signed in November 2022, Egypt said it would allow most fuel product prices to rise to bring domestic prices more in line with those in international energy markets.
It also promised to make up for a slowdown in such increases over the previous year. But it subsequently hiked prices only once, in March 2023.
The IMF agreement fell into abeyance last year after Egypt did not follow through on price rises and other commitments, including allowing its currency to move according to market forces, quickly selling state assets and reducing the government’s role in the economy.
The IMF this month expanded the financial support agreement to $8 billion to help Egypt overcome shocks to its economy caused by war in Gaza and after the government renewed its commitment to the reform measures, including a sharp devaluation of the currency.
The IMF board has not yet met to approve the new agreement.
The official gazette, citing the petroleum ministry, said a quarterly pricing committee raised petrol prices on Friday by 1.00 Egyptian pound ($0.02) per litre, with 80 octane rising to 11.00 pounds, 92 octane to 12.50 pounds and 95 octane to 13.50 pounds.
The IMF has argued that subsidised petrol prices mainly help the rich at the expense of the poor, most of whom do not own vehicles.
The pricing committee raised the price of diesel to 10.00 pounds from 8.25 pounds and the price of butane cooking gas to 100 pounds per cylinder from 75 pounds, according to the gazette, a newspaper dedicated to government decisions and announcements.
The committee also set the price of fuel oil at 7,500 pounds per tonne but left prices unchanged at 1,500 pounds per tonne for food industries and at 2,500 pounds per tonne for power plants.
Inflation reached record levels in 2023, with prices rising by 33.7%.
($1 = 46.6000 Egyptian pounds)