Egypt Hikes Domestic Fuel Prices: Rising Costs Impact Consumers

Egypt raised fuel prices across the board on Friday, marking the second increase this year as the government continues cutting subsidies to reduce the country's budget deficit. The hikes ranged from 10.5% to 12.9% for different petroleum products, following a roughly 15% increase back in April.

The Egyptian Petroleum Ministry announced it will freeze domestic fuel prices for at least one year after Friday's adjustment. This move signals the government's attempt to provide some stability after two significant price jumps in 2024.

Gasoline prices saw increases of up to 12.7%, depending on the octane rating. The official gazette set new prices: 80-octane gasoline now costs 17.75 Egyptian pounds per liter, 92-octane reaches 19.25 pounds, and premium 95-octane hits 21 pounds per liter. All prices include value-added tax.

Diesel prices jumped by 2 Egyptian pounds (about 4 cents USD) to 17.50 pounds per liter, up from 15.50 pounds. This matters because diesel is one of the most widely used fuels in Egypt, powering everything from transportation to industrial operations.

These price hikes reflect Egypt's broader economic strategy to reduce government spending on fuel subsidies. The country has been under pressure to cut these subsidies as part of efforts to stabilize its finances and meet international lending requirements. But higher fuel costs typically ripple through the economy, affecting transportation costs and potentially driving up prices for goods and services.

The timing comes as Egypt continues dealing with economic challenges, including currency devaluation and inflation pressures. The government's promise to hold prices steady for at least a year suggests officials recognize the need to balance fiscal reforms with public concerns about rising living costs.