State to gradually lift energy subsidies

The interim government will start to gradually lift energy subsidies before it leaves office at the beginning of the coming year without affecting the poor, Prime Minister Hazem El-Beblawi told AFP on Sunday.

Describing the government plan as "ambitious," Beblawi said that the plan depends on putting an end to the country's political instability.

There is widespread consensus that Egypt's huge subsidy regime needs to be reformed, but no government has been willing to take the political hit that will ensue from the likely spike in inflation afterwards.

The prime minister added that the government should be working on a plan to lift subsidies for the upcoming five to seven years, and it will only try to execute the plan's first stage.

He also stressed that the plan should be executed moderately, in an acceptable way and with extreme caution because the success of the plan depends on the implementation of the first stage.

He said that the subsidy reforms will not affect food subsidies and will be only focused on energy.

"[If the execution of the first stage of the plan fails] no one will ever dare on executing it again," he said.

Beblawi also stressed the importance of carrying out the roadmap, the transitional plan laid out by the military and political figures after former President Mohamed Morsi was forced from office.

"If the referendum over the constitution is run successfully, along with the parliamentary elections, this will encourage the government to be bold enough," he said, referring to more subsidy reform.