Egyptian Fuel Price Hikes: Impact and Causes Unveiled

The Egyptian government has increased fuel prices, causing inflationary pressures on the struggling population. The price of diesel rose from 8.5 Egyptian pounds ($0.18) to 10 pounds ($0.21) per litre, while 95 octane gasoline increased from 12.5 pounds ($0.27).

The hikes are due to the increased cost of importing energy due to the depreciation of the local currency and the global surge in energy prices following the Red Sea turmoil. The government also increased the cost of widely used butane gas cylinders from 75 Egyptian pounds ($1.61) to 100 pounds ($2.14).

Also, fuel price hikes are expected to further affect consumer purchasing power and inflation rates. The International Monetary Fund has set conditions for the disbursement of further loans to Egypt, which has been hit hard by years of government austerity, the coronavirus pandemic, Russia’s invasion of Ukraine, and the Israel-Hamas war in Gaza.

Egyptian government has also been hit by Houthi attacks on shipping routes in the Red Sea, which have slashed Suez Canal revenues and forced traffic away from the canal and around the tip of Africa.