Egypt's Prime Minister Sherif Ismail (File Photo:Reuters)
After the Egyptian cabinet cut energy subsidies on Thursday, Prime Minister Sherif Ismail said that economic reform decisions on the part of the state could no longer be delayed.
Briefly speaking at a press conference, Ismail said that the new economic decisions aligned with government efforts to redirect subsidies from energy towards measures that would protect low-income citizens.
"Without these decicisions the cost of fuel subsidies approaches EGP 150 billion, a cost the state cannot bear," Ismail said.
"Most of the time 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," he added.
Egypt’s cabinet announced on Thursday a new increase in fuel prices, effective immediately, in a move to cut down energy subsidies.
The price of 80-octane gasoline has increased from EGP 2.35 per litre to EGP 3.65.The price of 92-octane gasoline changed from EGP 3.50 to EGP 5, while the price of gas cylinders doubled from EGP 15 to EGP 30.
The move comes as part of the government's five-year plan to gradually scrap its fuel subsidy bill in the new 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 and fiscal reform package agreed on in July 2014 that aimed to ease the country's growing budget deficit.
The first increase of fuel prices came following the Central Bank of Egypt's move to freely float the pound in November.