BREAKING: Egypt Hikes Fuel Prices For First Time In 2025 As IMF Mandates Subsidy Cuts
Egypt has raised fuel prices by up to 15%, marking its first price hike of 2025, as part of efforts to reduce fuel subsidies in line with the terms of its International Monetary Fund (IMF) $8 billion loan agreement. The price increases, ranging from 11.76% to 14.81%, apply to a variety of fuel products and follow the IMF’s approval of a $1.2 billion disbursement in March after the completion of the fourth review of Egypt’s loan programme.
The increase comes just a month after the IMF issued a call for Egypt to lower its energy subsidies to achieve cost recovery by December. This marks the latest step in a broader economic restructuring program that Egypt has been undergoing since 2016 when it entered into a $12 billion IMF loan deal to stabilise its economy after years of political turmoil. As part of the agreement, Egypt has been working to reduce fuel, electricity, and food subsidies while strengthening its social safety nets.
Diesel fuel, a crucial commodity in the country, saw a price hike of 2 Egyptian pounds, from 13.50 to 15.50 pounds per litre. Gasoline prices also spiked, with 80 octane gasoline rising to 15.75 pounds per litre, 92 octane to 17.25 pounds, and 95 octane to 19 pounds. Additionally, the price of butane cooking gas jumped from 150 pounds to 200 pounds per cylinder.
Despite the hike, Prime Minister Mostafa Madbouly assured that the government would continue to subsidise diesel, though not at full cost recovery, and would work to reduce petroleum subsidies by the end of the year. Egypt’s ongoing subsidy expenditure remains significant, with the government spending approximately 10 billion Egyptian pounds ($197.7 million) each month on fuel subsidies, despite multiple price increases in 2024.
The country’s economic struggles have been exacerbated by a decline in revenues from the Suez Canal, a key source of foreign currency, and diminished natural gas production. These factors, combined with a shrinking supply of dollars, have placed additional pressure on Egypt’s economy. The government has also had to request a 46-month extended loan from the IMF to address foreign currency shortages, which have caused delays in business activity and port operations.
As part of the ongoing adjustments, Egypt’s currency, the pound, has lost more than two-thirds of its value against the dollar since early 2022. However, despite the increases, Egypt’s fuel prices remain among the lowest in the world, highlighting the continued economic challenges the country faces in balancing subsidy cuts with the need to address the financial strain caused by a lack of foreign currency.
