Gouda Abdel-Khaleq, minister of social solidarity and social justice, stated that the 2011/2012 budget will see an increase of LE20 billion to account for diesel and LPG subsidies, two petroleum derivatives witnessing shortages since last week.

Diesel is considered the basic fuel for heavy transport vehicles, some bakeries, electricity generators and a number of hotels in remote areas that need to generate their own electricity while LPG is mainly used for cooking. The minister said there is no intention to transform the in-kind subsidies to cash subsidies as the Mubarak regime had strongly pushed for in the face of opposition from many economists including Gouda Abdel-Khaleq himself.

Abdel-Khaleq announced that the ministry is considering the distribution of subsidised gas cylinder through coupons after studying families’ needs. The minister said many industries such as brick and aluminium are using the subsidised cylinders, meant for households, which is provoking the shortage crises. The government says a gas cylinder costs LE50 yet it is sold at LE2.5. LPG subsidies used in gas cylinders reached LE45 billion.