President, PM say price hikes aimed at saving Egypt from debt

The state continued to defend its decisions to increase fuel prices in an attempt to quell the uproar over price hikes introduced this weekend.

On Sunday, President Abdel Fattah al-Sisi said the decisions to increase fuel prices were necessary to ease Egypt’s debt, state-owned newspaper Al-Ahram reported.

In a meeting with chief editors of several newspapers, Sisi said that measures to increase prices had to be taken sooner or later so the country would not drown in debt.

Sisi added that Egypt, like other countries in the region, is in a state of war and that had price hikes been delayed, Egypt would have been LE3 trillion in debt.

On Friday, the government announced that it would be implementing a broad restructuring of petroleum product subsidies.

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.

The price of diesel is now at LE1.80 per liter, a 64 percent increase from the previous price of LE1.10, while 80-octane gasoline rose to 1.60 pounds per liter, a 78 percent increase from LE0.90.

The decision caused uproar among bus and taxi drivers and passengers alike.

Microbus and taxi drivers staged protests in different parts of the country.

Prime Minister Ibrahim Mehleb meanwhile defended the decision, saying it is in citizens' best interests.  

In a phone-in on ONtv on Sunday morning, Mehleb said the main message he wanted to deliver to Egyptians is that “this is for your own good,” adding that any country in an economic crisis is entitled to take such measures.

The prime minister acknowledged that there may be some disadvantages to the price hikes, and that citizens with lower incomes will bear the brunt for the increase in some services, but that “if we calculate it, eventually you are the main beneficiary.”

He explained that the price hikes will be translated into offering better services such as water, sanitation, and most importantly, healthcare.

Mehleb reminded Egyptians that this was built on an agreement between the people and President Sisi.

“Didn’t we agree on reform?” Mehleb asked. “Sisi promised reform in his campaign.”

“We will not let the country drown in debt,” he added, “even if the prices have increased for the time being, a better quality life will eventually be the outcome.”

Meanwhile, a government source told Al-Ahram that increasing fuel prices are a “bitter medicine” that the people have to endure given the budget deficit.

The source explained that the state’s budget deficit stood at around 15.5 percent between 2013–2014, and that aid from Gulf states had helped ease the burden.

He added, however, that Gulf aid is expected to run out next August.