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The revision of fuel prices will have a bearing on the cost of living of an average Egyptian. The price of diesel rose from USD 0.18 to USD 0.21 per liter. It has increased the e price of 95 octane gasoline to USD 0.29 per liter from USD 0.27
The Egyptian government raised fuel prices, which can add to inflationary pressure in the country since the hike will have a cascading impact on all segments of the economy, particularly the cost of transport.
The revision of fuel prices will have a bearing on the cost of living of an average Egyptian. The price of diesel rose from USD 0.18 to USD 0.21 per liter. It has increased the price of 95 octane gasoline to 13.5 Egyptian pounds USD 0.29 per liter from USD 0.27. The Northern African country is a net importer of hydrocarbon products.
The hike in petroleum products has become imperative because of the depreciation of the local currency vis a vis dollar and the global surge in energy prices riding on the back of the turmoil in the Red Sea. On March 6, Egypt’s central bank announced the adoption of a market-based exchange rate after nearly a year of defending an over-valued local currency. The pound’s official rate fell from nearly 31 to 51 per US dollar before appreciating by nearly 10% in recent weeks.
The government also increased the cost of widely used butane gas cylinders from 75 Egyptian pounds USD 1.61 to 100 pounds USD 2.14. Egyptians consume around 800,000 butane cylinders a day, 50% of which are imported.
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The fuel price hikes are expected to further affect consumer purchasing power and inflation rates. Last month, the annual urban inflation rate jumped to 35.7% from 29.8% in January. The cost of food alone increased nearly 51% in February from a year earlier. The Egyptian economy has been hit hard by years of government austerity, the coronavirus pandemic, the fallout from Russia’s invasion of Ukraine, and most recently, the Israel-Hamas war in Gaza.
