The cabinet negates increasing fuel prices by 25%

CAIRO - 14 October 2018: The Cabinet negated raising fuel prices by 25 percent by the beginning of 2019. The statement was issued on Oct.14 in response to fake news that went viral on social media.

President Abdel Fatah al-Sisi stated in the 23rd Armed Forces Informative Session that state fuel subsidies reached LE125 billion in the aftermath of the hike in oil prices globally. Over the past eight months, the price per barrel rose from $40 to $85. Minister of Electricity and Renewable Energy said that electricity subsidies would double to record LE70 billion, if natural gas prices rise as well.

Minister of Finance Mohamed Moet stated in September that oil prices would not distort the budget because they would not go beyond a certain level.

Egypt will halve its diesel oil imports by the beginning of 2019 as the Mostorod refinery complex will be piloted in December, a source at the Egyptian General Petroleum Corporation said.

In statements to MENA on Thursday, the source said the complex will come online in the first quarter of 2019 and the complex is expected to produce about 2.3 million tons of diesel oil annually.

The 4.270-billion-dollar complex will secure about 12 percent of the local market needs of petroleum products, the source said.

The complex will be one of the largest oil refining facilities in the Middle East, having an annual production capacity that stands at 80,000 tons of butane, 600,000 tons of jet fuel, 450,000 tons of coal, and 96,000 tons of sulfur, the source added.

Egypt embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

The country has floated its currency in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).

The IMF loan helped the state’s foreign reserves to rebound by receiving the first three tranches of the loan with a total value of $6.08 billion.

In June, the Cabinet decreased fuel subsidies for the fourth time since 2015 so as energy prices would be floated within two to three years.

Gasoline 95 prices went up from LE 6.6 ($ 0.37) per liter to LE 7.7, while 92 octane gasoline prices amounted to LE 6.75 instead of LE 5 per liter. Prices of gasoline 80's liter increased to LE 5.5 instead of LE 3.65, the newly-appointed government said in its first move since taking oath Thursday.

The price of diesel will be LE 5.5 a liter instead of LE 3.65, while the price of natural gas used for vehicles rose to LE 2.75 per cubic meter instead of LE 2.

Meanwhile, the government has announced raising the price of the cooking gas cylinder to LE 50 instead of LE 30 and the commercial gas cylinder's prices surged to LE 100 instead of LE 60.