Govt raises fuel prices by LE2, natural gas for vehicles up 43%

The government raised fuel prices on Friday, increasing the cost of gasoline and diesel by LE2 per liter and natural gas for vehicles by LE3. 

A Petroleum Ministry statement issued with the repricing decision on Friday said prices will remain fixed for at least one year.

Diesel is now priced at LE17.5 per liter, 80 octane gasoline at LE17.75 per liter, 92 octane at LE19.25 per liter, and 95 octane at LE21 per liter.

Natural gas used in vehicles is now set at LE10 per cubic meter, representing the sharpest price increase, around 43 percent.

The following chart shows the scale of Friday’s fuel price adjustments as per the Automatic Fuel Pricing Committee's decision.

The automatic fuel pricing mechanism, introduced in 2019, is a quarterly process in which a committee under the Petroleum Minister reviews fuel prices. It is part of Egypt’s policy to phase out energy subsidies, in line with its loan agreement with the International Monetary Fund. 

The system links domestic fuel prices to local production costs, global prices and the currency exchange rate, allowing for a 10 percent price change in either direction. 

However, the government has exceeded this margin on multiple occasions, including with this latest price hike.

The Petroleum Ministry said the decision to fix prices until 2026 was based on the “continued efforts of the petroleum sector to operate refineries at full capacity, settle arrears owed to partners, and offer them incentives to boost production and reduce import costs, which would help achieve relative cost stability and narrow the gap between costs and retail prices.”

The government has delayed paying dues to international energy companies operating in the country, with around US$3 billion in arrears, according to sources who spoke to Mada Masr in recent weeks.

Prime Minister Mostafa Madbuly signaled last month that this fuel price hike might be the last major increase, provided that global prices remain stable. He also noted that diesel would continue to be subsidized to some extent due to its direct impact on production costs and inflation.

Friday’s decision marks the second fuel price adjustment this year, following an earlier increase in April. This latest increase was initially scheduled for July.