Egypt's Petroleum and Mineral Resources ministry Spokesperson Hamdy Abdel Aziz (Photo: Ahram)
Saturday's fuel hike is set to save EGP 50 billion for the state, and to reduce fuel consumption between three to five percent, according to Egypt's petroleum ministry spokesperson Hamdy Abdel Aziz, who spoke to Ahram Online.
The increase is expected to cut the state's fuel subsidy bill from EGP 140 billion to EGP 89 billion, said Abdel Aziz.
The spokesperson explained that the government establishes the subsidy amounts based on three factors: exchange rates; fuel consumption and the international Brent crude fuel prices.
Abdel Aziz added that the new cuts to subsidies have allowed the ministry to cover 75 to 80 percent of the costs of petroleum production, although "the cost of fuel and petroleum production is not fixed, according to Abdel Aziz," referring to fluctuations in international crude fuel prices, which among other factors can alter costs.
"The price at which fuel and petroleum products are sold in Egypt currently cover between 75 to 80%," says Abdel Aziz.
Saturday's fuel price increases represent a third rise in fuel prices since the flotation of the Egyptian pound in November 2016.
The increases, adopted by the Council of Ministers and implemented on Saturday morning, were widely anticipated as part of Egypt’s loan agreement with the International Monetary Fund.