Egypt is set to increase petrol prices by up to 15 percent starting Friday, in line with reforms required by the International Monetary Fund. This marks the second fuel price hike in four months as part of a plan to gradually reduce fuel subsidies. The move aims to unlock new loans from the IMF, with the next tranche totaling $820 million. Diesel prices will also increase, reflecting the country’s efforts to align domestic fuel costs with international markets.
The decision comes as Egypt grapples with its worst economic crisis in over a decade, driven by soaring foreign debt, inflation, and multiple currency devaluations. The government aims to completely remove fuel subsidies by 2025 to stabilize its budget. Nearly 30 percent of Egyptians currently live in poverty, highlighting the urgency of economic reforms.
In addition to internal challenges, Egypt faces regional tensions, including conflicts in Gaza and Sudan and disruptions in Red Sea shipping routes due to Houthi attacks. These factors have impacted revenues from the Suez Canal, which experienced a significant drop in the last fiscal year.
The IMF has called for broad economic reforms, such as a shift to a liberal exchange regime, reduced government spending, and increased private investment. These measures aim to restore Egypt’s economic stability and drive sustainable growth. The country’s commitment to implementing these reforms will be crucial in overcoming its current economic challenges and securing future financial support.
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