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Egyptians face costlier commutes after latest increase in fuel prices

The government announced the third increase in fuel prices in less than two years

Ahmed Morsy , Friday 22 Jun 2018
Gas station in Cairo
File Photo: Vehicles are fueled by employees at a CO-OP gas station in Cairo (Reuters)

As part of its ongoing economic reform programme the government has reduced subsidies on fuel.

The price of diesel, mainly used by microbuses and agricultural tractors, was raised by 50.7 per cent, from LE3.65 a litre to LE5.50. Natural gas for cars was increased from LE2 per cubic metre to LE2.72 and the price of butane gas cylinder increased from LE30 to LE50.

Eighty octane gasoline goes up from LE3.65 to LE5.5 a litre, 92 octane from LE5 to LE6.7 5and 95 octane gasoline from LE6.60 to LE7.75.

Hassan, a micro-bus driver on the Helwan to Nasr City route, told Al-Ahram Weekly that though increases had been expected, the rate took everyone by surprise. “Given earlier price increases per litre of diesel, nobody expected such a big percentage jump,” he said.

Hassan says that though fares for commuters on his bus will increase by LE0.75 they will not cover the increased cost of fuel

Clashes between drivers and passengers protesting the increase in fares have been reported at some microbus and minibus stations.

Following this week’s hike in fuel prices Cairo governorate announced its own ticket price increases. Standard minibus fares will increase from LE3 to LE4, smart minibus fares raised from LE3.5 to LE4.25, fares in new cities from LE4.5 to LE5 and on air-conditioned buses with WiFi from LE7 to LE8.

Samira, a housewife who lives in Helwan, says the most disadvantaged are hardest hit by the price hikes.

“I was visiting relatives in Nasr City with my children and it cost an extra LE0.75 for each of us to get there. And the fare hikes come when all of life’s necessities are increasing in price. People on low incomes are being crushed,” she said.

Metered taxis will also become more expensive. Starting fares in white cabs will increase from LE5 to LE6, and each subsequent kilometre from LE2 to LE2.50.

Even so, complains Ahmed Ramadan, a taxi driver, his income will go down since the increased tariff doesn’t fully cover the increase in costs.

Said Mohamed, who also drives a taxi, used to buy 20 litres of octane 80 for LE73. Now it will cost LE110. “Many passengers,” he says, “will think twice about taking a taxi with the increased fares.”

Islam Emad, a 34-year-old engineer, complains it is the biggest increase in the price of 92 octane gasoline since 2013.

Before July 2014 the price of 92 octane was LE1.85. It then increased to LE2.60 a litre, jumped in November 2016 to LE3.50 and then to LE5 in June 2017. Now it is LE6.75.

“I work in the Smart Village in Six October City and live in Nasr City. I use my car everyday to go to work and now this will cost me a fortune. The new increase in fuel prices should be accompanied by an increase in salaries but I don’t think that’s going to happen,” says Emad.

Ingi Abdel-Tawwab believes the increased cost of fuel might have been bearable had it not come on the back of hikes in the price of electricity, piped water and metro tickets. “The increases in the cost of living have become unbearable,” she says.

On Monday, the US-based ride-hailing application Uber increased fares in Egypt. “A slight increase to our prices was made to ensure that the drivers continue to make a sustainable living,” the company said. For the normal Uber X ride the starting fare has increased from LE6 to LE7, with each additional kilometre charged at LE2.3 of LE1.85.

Minister of Petroleum Tarek Al-Mullah says phasing out subsides on petroleum is a necessary step to ensure the funding that is available for subsidies targets the most needy. As it is, subsidising the costs of running a car, a prerogative of the wealthiest citizens, means the rich benefit far more from subsidies than the poor.

The current subsidy system puts pressure on of the government’s budget and hinders any hope for improvements in living standards. It also encourages over consumption of petroleum.

*A version of this article appears in print in the 21 June 2018 edition of Al-Ahram Weekly with headline: Costlier commutes  

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