People jostle for a fuel dispenser nozzle as a worker fills the tank of a car at a petrol station in Cairo (File Photo: Reuters)
Egypt’s cabinet announced on Thursday a cut in energy subsidies, effective immediately, resulting in an increase in fuel prices.
The price of 80-octane gasoline has increased from EGP 2.35 per litre to EGP 3.65.
The price of 92-octane gasoline has been raised from EGP 3.50 to EGP 5.
The price of gas cylinders has doubled from EGP 15 to EGP 30.
Prime Minister Sherif Ismail said on Thursday that the implementation of economic reform measures can no longer be delayed.
"The cost of fuel subsidies approaches EGP 150 billion, a cost the state cannot bear," Ismail said.
Ismail said that the cuts in energy subsidies will free up funds that will be redirected towards measures that would protect low-income citizens.
"Mostly there has been no justice in the distribution of subsidies. What we are doing now is correcting the allocation of subsidies as part of the country's economic reform programme," Ismail said.
The move comes as part of the government's five-year plan to gradually scrap its fuel subsidy bill from the state budget. The goal is to decrease subsidies from EGP 145 billion this fiscal year – which ends in June – to EGP 110 billion in the 2017/18 fiscal year.
Fuel subsidy cuts were part of an economic reform package adopted in July 2014 that aimed to ease the country's growing budget deficit.
The first increase of fuel prices came in November, shortly following the Central Bank of Egypt freely floated the pound.