Cabinet considers implementing monetary subsidies

Minister of Supplies and Internal Trade Khaled Hanafy said that the government is considering the implementation of monetary subsidies for the poor alongside the existing food subsidies system, state-owned Middle East News Agency (MENA) reported on Thursday.

Hanafy also added that the food subsidies system will be restructured to include 200,000 poor families in the system. The ration cards registry will also be modified to exclude those who are outside the country and the deceased as well.

The decision comes as Egyptians brace for broad price hikes following a recent contentious decision by the government to partially lift fuel subsidies last month.

The highest increases are in some of the most commonly used petroleum products, ones that will have a direct effect on the cost of transportation of food and goods, as well as public transportation, namely diesel and 80-octane gasoline.

For years, Egypt has been urged to restructure its wasteful and inefficient subsidy program, but successive governments have shied away from the socially sensitive move due to the anticipated political cost and the risk of social unrest. Despite this, news of the broad subsidy cuts came as a surprise to many, especially given the rate at which diesel prices have increased and the expected immediate uptick in food prices.

Prime Minister Ibrahim Mehleb said on Saturday that the increase in fuel prices will save LE51 billion in the 2014/2015 budget and that LE22 billion of that will be used to develop education and healthcare in Egypt.