Egypt to lift fuel subsidies completely by end 2025

Ahram Online , Wednesday 29 May 2024

Egypt is implementing a plan to gradually lift fuel subsidies until the end of 2025, government spokesperson Mohamed El-Homossani stated on Tuesday.

fuel pump
File Photo: Fuel pumps at a petrol station in Cairo. Photo courtesy of Egyptian state information service.

 

The state bears a significant cost for subsidizing fuel and electricity, he added in a phone-in on TV.

The electricity sector receives natural gas and mazut to operate power plants at less than their actual cost, he noted.

Prime Minister Mostafa Madbouly ordered a four-year plan to implement the conditions prevalent from 2016 to 2021 when fuel subsidies were eliminated, El-Homossani said.

Subsidies for octane, diesel, and other petroleum products have totalled approximately EGP 119.419 billion in the current budget, which commenced on 1 July 2023, with an increase of about EGP 61.325 billion.

El-Homossani explained that while the state will continue to subsidize bread, there will be a slight increase in its price. He assured the public, however, that "the price adjustment will be minimal and will not affect citizens."

A subsidized loaf is sold for PT5, but it costs the state EGP 1.25. "This is a significant burden on the budget," he added.

Replacing in-kind subsidies with cash assistance was only a proposal presented by several experts, El-Homossani pointed out.

The proposal will be discussed in a national dialogue in the near future, he said. Adopting the proposal requires societal consensus, the spokesman added.

El-Homossani's statement follows Madbouly's announcement on Monday of the reduction of bread and fuel subsidies.

 

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