Govt raises fuel prices by up to 33%

Fuel prices were hiked across the country on Friday morning by the Petroleum Ministry, with some fuel types increasing by up to 33 percent since the last price revision.

The ministry has raised prices gradually over recent years as it seeks to close the gap between consumer and commercial prices and its own expenditure on fuel, an increasingly expensive resource for the ministry to procure.

Under the new revision, announced on Thursday night, a cylinder of household cooking gas now sells for LE200, up from LE150 in October last year. A commercial-use cylinder will now cost LE400, up from what newspapers said was a previous retail price of LE300. 

Diesel fuel has been priced at LE15.5 per liter, 80 octane gasoline at LE15.75,  92 octane gasoline at LE17.25, 95 octane gasoline at LE19 and kerosene at LE15.5 per liter. 

Industrial supply fuel oil (mazut) rose to LE10,500 per ton. The price of natural gas supplied to brick kilns is now set at LE210 per million British thermal units (Btu), and bulk natural gas used for refilling/redistribution at LE16,000 per million Btu.

No more fuel hikes are on the way in the coming six months, the Petroleum Ministry promised in a follow-up statement on Friday. 

However, the ministry said that the latest increase still falls short of closing the gap between costs and retail prices “due to the significant increase in costs, which the new increases still do not absorb.”

The ministry said that the government remains committed to mitigating the social impact of the price hikes by continuing to direct the bulk of its subsidies toward diesel, cooking gas and 80 and 92-octane gasoline “to ease the burden on citizens.”

It also noted that Egypt currently imports around 40 percent of the diesel it consumes domestically, around 50 percent of cooking gas and 25 percent of its gasoline needs. 

According to the ministry’s statement, the government currently bears an estimated daily fuel subsidy cost of LE366 million — around LE11 billion per month — to cover the gap between the actual cost of benzene products, cooking gas and diesel alone. 

Since 2014, the government has sought to end fuel subsidies, which  have been in place since the 1950s, in line with recommendations under successive loan programs with the International Monetary Fund.

It began introducing successive fuel price increases in 2014, later establishing the Petroleum Ministry’s Automatic Fuel Pricing Committee, which was tasked with reviewing prices quarterly to gradually lift subsidies while shielding the domestic economy from full exposure to the turbulence of global fuel markets.

Brent crude prices plummeted on international markets this week as global trade absorbed the shock of United States President Donald Trump’s aggressive new tariff regime.

But the ministry said the drop had only a marginal effect on the cost of diesel locally, reducing it by just LE0.4 per liter. The price gap will remain significant, taking into account the market outlook for the coming period given the volatility in petroleum product prices and geopolitical and economic tensions, as well as rising production, transport and import costs, the ministry said.

Prime Minister Mostafa Madbuly commented on the drop in global prices in a Wednesday press conference, saying that if global oil prices remain low, future price increases could be more moderate and fall below the maximum limit targeted for the end of the year. 

He stressed, however, that “we still have a gap, and nobody knows whether the prices will stabilize or rise again.”

Madbuly also said that the government purchases petroleum on the global market through forward contracts, under which it pays a portion upfront while deferring the remainder over a period of three to nine months. This kind of payment arrangement, he said, adds an interest margin to the price of each barrel. 

The government has said it plans to liberalize fuel prices completely by the end of 2025.