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Fuel Subsidies To Go Down, Prices To Go Up by 65%

The Egyptian government is aiming to radically curb fuel subsidies so prices are going to go up, up, up!

First it was electricity and now it's fuel. 

According to Reuters, the Egyptian government is not only planning to end fuel subsidies within the coming three years but also increase fuel prices to 65 percent of their cost during the 2016/17 fiscal year. 

In order to stabilise the ailing economy, austerity measures have started being implemented and Egypt has finalised a $12 billion loan agreement with the International Monetary Fund for a three-year program which is awaiting final approval. 

"What was agreed lately with the IMF delegation in Egypt is cancelling fuel subsidies within three years," said one of the two anonymous officials who spoke to Reuters. 

They also reported that a spokesman from the Ministry of Petroleum had said that "no decisions have been issued on that matter."

Currently, various fuels used in Egypt are subsidised for approximately half their original prices; gasoline in 92-octane category is subsidised and sold at 58 percent and the 80-octane category is sold at 57 percent of its original cost. 

Reuters specified that the cost of petroleum subsidies fell to 55 billion Egyptian pounds ($6.2 billion) in 2015/16 from 71.5 billion pounds the previous year.

Egypt has been trying to improve the economy since the 2011 revolution since the country has been hit by political instability and terrorism attacks. The latter have particularly discouraged tourists from coming to Egypt despite the government's best attempts to draw them back through campaigns and online resources.

Main photo courtesy of Al-Ahram Online/ Reuters.