It is expected that fuel prices in Egypt for the third quarter of this year (2023) will witness a surprise, amid anticipation in the street for the meeting of the Automatic Pricing Committee for Petroleum Products, after it was surprised by the hike in diesel prices last May.
Sources revealed in statements to the specialized energy platform that the moves within the government are moving in the direction of not raising diesel prices in the third quarter, and contenting themselves with the last announced increase.
The sources said that the pricing committee is currently studying a new increase in the prices of gasoline of all kinds, which may reach one pound ($0.032), which is the same value with which prices were moved on the first of last March.
And she continued, “Raising fuel prices is one of the sovereign decisions that are first presented to President Abdel Fattah El-Sisi, and the committee must obtain the green light before announcing it.”
Diesel prices in Egypt
In their statements to the specialized energy platform, the sources stressed that the Egyptian government’s tendency not to raise diesel prices came to take into account the social dimensions of citizens, after the recent increase contributed to the rise in living prices and the increase in inflation rates to record levels.
And the government had decided, on May 3, 2023, to raise the price of diesel (diesel) by about one pound, with the price of gasoline fixed, according to the data seen by the energy platform.
At the time, the Ministry of Petroleum and Mineral Resources announced a number of reasons that prompted it to increase the selling price of diesel locally, foremost of which was the rise in international prices for oil derivatives, the decline in the exchange rate of the Egyptian pound against the dollar, and the high cost of saving one liter of diesel for the state, to reach 12.25 pounds (0.40 pounds). dollars).
Egypt’s production of diesel had recorded a 12.4% increase during 2022, recording 10.9 million tons, compared to 9.7 million tons in 2021, while the value of Egypt’s diesel imports amounted to about $3.5 billion, compared to $2.2 billion during (2021), an increase of $ 1.3 billion, or 58.8%, according to the data seen by the specialized energy platform.
Gasoline prices in Egypt
The street is currently awaiting the announcement of gasoline prices in Egypt, as the Automatic Pricing Committee for Petroleum Products is preparing to hold its quarterly meeting to determine fuel prices in Egypt, which are scheduled to be implemented in the third quarter of 2023.
In their statements to the energy platform, the sources said that the movement of diesel prices only about two months ago would be a sufficient reason to keep its price at the same levels during the current quarter, especially in light of the drop in average oil prices in the second quarter of this year.
Oil prices recorded quarterly losses in the second quarter of 2023 for the fourth time in a row, as Brent crude declined by 5.7%, and West Texas Intermediate crude fell by 6.7%, according to data monitored by the specialized energy platform.
The sources attributed the plans to raise the prices of gasoline of all kinds to the same reasons cited by the government in May, when it announced a hike in the price of diesel, foremost of which was the decline in the exchange rate of the Egyptian pound against the dollar.
Fuel prices in Egypt are determined based on a price equation that takes into account 3 main factors, namely, international oil prices from Brent crude, the exchange rate of the dollar against the Egyptian pound, and calculating the value of transportation, refining and other burdens.
The sources pointed out that in light of the stability of only one of the three components, namely oil prices, and the rise of the last two components (the dollar exchange rate and the cost of transportation, especially after raising diesel prices), the closest trend would be to raise gasoline prices in Egypt.
Mechanism for determining fuel prices in Egypt
Fuel prices in Egypt are determined by the Automatic Pricing Committee for Petroleum Products, which is formed by a decision of the Prime Minister. It holds a meeting once every 3 months to approve new prices, based on a number of criteria.
And Egypt had decided, starting in July 2019, with the liberalization of gasoline and diesel prices – to work with 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, It is obligated, when making any decision about fuel prices, not to be more or less than 10%.
According to the latest decisions of the Petroleum Derivatives Prices Committee, fuel prices in Egypt currently in force are:
- The price of a liter of diesel (diesel) and kerosene is 8.25 pounds.
- The price of a liter of 80 petrol is 8.75 pounds.
- The price of a liter of 92 petrol is 10.25 pounds.
- The price of a liter of 95 petrol is 11.50 pounds.
- The price of a ton of diesel, other than electricity and bakery uses, is 6 thousand pounds.
(One US dollar equals 30.90 Egyptian pounds)
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