Starting today, Thursday, May 4 (2023), fuel prices in Egypt witnessed a new increase in the price of “diesel” fuel, with the prices of gasoline and other oil derivatives being fixed.
The increase in diesel prices in Egypt, which was approved late yesterday evening, Wednesday, May 3, came about two months after the largest increase in gasoline prices in terms of value since the liberalization of the fuel price more than 3 years ago.
Fuel prices in Egypt are determined by the Petroleum Pricing Committee formed by a decision of Prime Minister Mostafa Madbouly, which holds a meeting every 3 months to approve new prices, based on a number of criteria. One of the most important is world oil prices.
And Egypt had decided, starting in July 2019, to liberalize the prices of gasoline and diesel – diesel – and to work on a quarterly pricing mechanism – every 3 months – through a committee formed by a decision of the Prime Minister, whose membership includes representatives from the Ministries of Petroleum and Finance, namely It is obligated, when making any decision about fuel prices, not to be more or less than 10%.
The reasons for the increase in diesel prices
The Ministry of Petroleum and Mineral Resources announced that the decision to increase the price of selling diesel fuel locally for several reasons. They are as follows:
- The rise in global prices of oil derivatives.
- The exchange rate of the Egyptian pound fell against the dollar.
- An increase in the cost of saving one liter of diesel for the state, reaching 12.25 pounds ($0.40).
The ministry indicated that the government bore the repercussions of the global challenges resulting from the Russian-Ukrainian crisis during the period from July 2022 to April 2023, and worked not to move diesel prices.
She explained that despite the increase in the price of diesel to 8.25 pounds ($0.27) per liter; The state still bears the cost difference in the form of subsidies, after the cost of selling it was equivalent to the cost of providing it.
* The dollar is equivalent to about 31 Egyptian pounds.
Fuel prices in Egypt 2023
On Wednesday evening, May 3, 2023, the Committee for Automatic Pricing of Petroleum Products announced an increase in diesel prices after reviewing the price equation and implementing the mechanism for applying automatic pricing.
She said that in light of the increase in international oil prices, oil derivatives, and the exchange rate of the pound against the dollar, the committee decided to increase the price of diesel by one pound and fix the prices of gasoline and diesel starting from two o’clock in the morning local time on Thursday, May 4, 2023.
The fuel prices in Egypt are as follows:
- Increasing the price of a liter of diesel (diesel) and kerosene from 7.25 pounds to 8.25 pounds.
- Fixing the price of a liter of 80 petrol at 8.75 pounds.
- Fixing the price of a liter of 92 petrol at 10.25 pounds.
- The price of a liter of 95-octane gasoline was fixed at 11.50 pounds.
- Fixing the price of a ton of diesel other than electricity and bakery uses at 6,000 pounds.
Fuel subsidies in Egypt
The Ministry of Petroleum revealed that subsidies targeting diesel only reached EGP 222 million ($7.17 million) per day, equivalent to EGP 6.7 billion ($220 million) per month, with a total of EGP 80 billion ($2.59 billion) annually for diesel subsidies only.
And she indicated that after implementing the decision to increase by one pound per liter; Diesel still costs the state a daily subsidy of 178 million pounds ($5.75 million), instead of 222 million pounds, equivalent to 5.3 billion pounds ($170 million) per month, with a total of 64 billion pounds ($2.07 billion) annually.
The government pointed out that the price of “diesel” fuel remained constant and did not change for the consumer throughout the period from July 2019 to July 2022 for a period of 3 years at a price of 6.75 pounds per liter, then increased by 0.5 pounds last July to be sold at 7.25 pounds per liter during the period. From July 2022 to April 2023.
It is noteworthy that the Egyptian economic reform program, which was launched in 2016, included among its most important goals the reform of energy subsidies and correcting their prices through a gradual time programme. The break-even point was reached in June 2019, in which the selling price is equal to the cost of diesel, gasoline and industrial fuel, taking into account Price distortions between products.
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