Egypt raises fuel prices again in four months to secure IMF loan

AFRICAN BUSINESS AND ECONOMYJuly 30, 2024 at 9:52 AM UTC

TLDR

Egypt raises fuel prices by up to 15% to meet IMF conditions for unlocking new loans.
Petrol prices surge by 15%, now priced between 12.25 and 15 pounds per liter.
Diesel prices also increase, from 10 to 11.50 Egyptian pounds per liter.

Egypt is raising fuel prices for the second time in four months to meet an economic reform condition set by the International Monetary Fund, aimed at unlocking hundreds of millions in new loans.

The official gazette reported an up to 15% price hike for petrol last Thursday, four days before the IMF is scheduled to review its $8 billion loan program, with the next tranche being $820 million. The price increase took effect the following day.

As a result, petrol prices have increased by about 15%, now ranging from 12.25 to 15 pounds ($0.25 to $0.31) per liter. The decision also affects diesel, one of Egypt’s most commonly used fuels, raising its price from 10 Egyptian pounds ($0.21) to 11.50 pounds ($0.24) per liter.

Key Takeaways

Egypt introduced an initial round of price hikes in March to bring domestic prices closer to those in international markets. The government aims to fully remove fuel subsidies by the end of 2025. This move comes as Egypt faces its worst economic crisis in over a decade, marked by ballooning foreign debt, high inflation, and multiple devaluations of the local currency. Inflation peaked at nearly 40% last year before decreasing to 27.5% in June. The IMF has demanded that Egypt implement wide-ranging reforms to reset its economy, including shifting to a liberal exchange regime, reducing government spending, and incentivizing private investment. These reforms are conditions for accessing further financial support from the IMF, aimed at stabilizing Egypt's economy.

Egypt

Economy

IMF

Fuel Price Hike

Petrol Prices

Egypt Bailout