Subsidy cuts to fuel products will be frozen for the coming year, according to Finance Minister Amr El Garhy.
During a press conference on Wednesday, Egyptian Finance Minister Amr El Garhy said that the government does not intend to introduce any more cuts to fuel subsidies for the coming fiscal year, according to reports from Al Ahram.
Major cuts to energy subsidies came last June which caused an approximate 43% increase in the price of 92 Octane petrol, rising from 3.5 EGP to 5 EGP a litre. The move came only seven months after the previous subsidy cuts, when the price increased from 2.6 EGP a litre, hours after the Central Bank decided to float the Egyptian pound.
The cuts are part of an ongoing economic austerity programme adopted in July 2014 by the current administration in a bid to reduce the government’s significant budget deficit. The programme consists of a five-year plan to completely remove fuel subsidies.
On Tuesday, the International Monetary Fund released its assessment of Egypt’s austerity cuts in a review of the $12 billion loan it intends to provide if reforms continue as planned. The review said the subsidy cuts are crucial for the loan to be approved.
Main image: REUTERS/Mohamed Abd El Ghany.