Egypt cuts fuel prices for first time since 2016
Gov’t cuts fuel prices for first time since 2016: The government has revised down prices for all grades of fuel by EGP 0.25 per liter on the back of lower average crude prices and a stronger EGP, the cabinet said in a statement. The committee in charge of setting prices under the automatic fuel pricing mechanism lowered the price of 95-octane fuel to EGP 8.75 from EGP 9 per liter, 92-octane to EGP 7.75 from EGP 8.00 per liter, and 80-octane to EGP 6.5 from 6.75 per liter. Mazut fuel oil for use in factories was, meanwhile, lowered by EGP 250 to EGP 4,250. The rates took effect at midnight on 4 October, and will last through 4Q2019. The committee will next convene at the end of December to decide on 1Q2020 rates.
Decision beats expert expectations: Analysts had expected the government to leave fuel prices unchanged for 4Q2019, citing a strong EGP and the expectation for relatively stable global oil prices. Crude prices averaged USD 62 per barrel last quarter, below the USD 67 mark used in the state’s FY 2019-2020 budget. The USD/EGP rate also saw an average of 16.60. This is the first time fuel prices have been cut since Egypt began phasing out fuel subsidies in 2016. The automatic fuel price mechanism, which came into effect in April, allows the government to decide on fuel prices every quarter based on global oil prices and the USD exchange rate.