Government has no choice but to hike fuel prices in July
Higher fuel prices in July look like they might be reality, unnamed Petroleum Ministry officials tell AMAY. With a projected energy subsidy bill next year of around EGP 140 bn — of which EGP 110 bn are earmarked for petroleum products and EGP 30 bn for electricity — the government doesn’t really have much of a choice, the sources explain. We noted earlier this week that some in the government were angling for a delay in plans to raise the price of 92-grade octane petrol by EGP 1 per liter to EGP 4.5 per liter starting 1 July. They say this delay might offset the effects of an inevitable hike in electricity prices coming next month. Electricity prices could rise by 10-15% for the lowest consumption brackets, while higher consumption brackets could see increases ranging from 20-40%, unnamed Electricity Ministry officials tell Al Borsa.
But some members of the House of Representatives appear want to delay energy pricehikes including fuel and electricity. A number of MPs reportedly sent official requests to the Electricity Ministry asking that it delay planned price increases to avoid adding to inflationary pressures, the newspaper adds. The requests also proposed different scenarios for the price hikes and suggests that the ministry also extend its timeline for the phase-out of electricity subsidies to 10 years. Minister Mohamed Shaker had said this week though that the government is already considering pushing the timeline by another two or three years instead of removing subsidies entirely by 2019 as originally planned.