Government increases prices for household and commercial gas by up to 75%

Egypt’s households and commercial premises will see higher gas bills starting in August of this year, according to a Cabinet statement published in the Saturday edition of the Official Gazette outlining increases in gas tariffs.

According to the statement, the new prices for the three consumption brackets will be implemented as follows:

The Cabinet last introduced higher gas prices for domestic and business activities in July 2017, with hikes of between 12.5-33 percent implemented for the same three consumption brackets in August 2017.

Substantially higher costs for LPG cylinders — which are used as an alternative to gas in some households and commercial outlets — were also introduced in June 2018, as the government raised the prices of various fuel types by up to 66.7 percent.

The hike in gas tariffs is the latest in a series of fuel price increases that began in 2014, a month after President Abdel Fattah al-Sisi officially took office. The increases comprise part of a plan to cut subsidies in order to reduce the fuel subsidy bill in the state budget.

Reducing subsidies is one of the recommendations outlined in the structural adjustment program which accompanied the US$12 billion loan agreement  reached between Egypt and the International Monetary Fund in 2016. The program aims to liberalize markets and restructure the state budget, and has led to a marked increase in the costs of basic goods and services.

The government reduced its allocation for fuel subsidies to LE89 billion in the state budget for fiscal year 2018/19, down from the LE120 billion allocated for fuel subsidies in the FY 2017/18 state budget.