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Thursday, 2 March 2023

Fuel prices are rising 7-11% today

Fuel prices have risen by as much as 11% following a decision by the government’s fuel pricing committee that will drive inflation up in an economy already struggling with soaring prices. In a statement in the early hours of the morning, the Oil Ministry said that as of today petrol prices will rise by 7-11% and the cost of mazut for most buyers will increase by 20%.

Gasoline (petrol) prices as of today:

  • 95-octane is EGP 11.50 per liter, up 7% from the previous EGP 10.75.
  • 92-octane is EGP 10.25 per liter, up 10.8% from the previous EGP 9.25.
  • 80-octane is EGP 8.75 per liter, up 9.4% from the previous EGP 8.00.

Mazut (fuel oil) prices are rising 20% to EGP 6k per ton for all buyers except food and electricity producers, who will continue to be charged EGP 4.2k. Diesel prices will remain unchanged at EGP 7.25 per liter, with the fuel pricing committee maintaining diesel prices for a second consecutive time after an unexpected hike last July.

The rationale: The increase comes on the back of “fluctuations in Brent crude oil prices and the EGP’s exchange rate [devaluation] against the greenback,” the ministry said.

This was expected: The government has committed to changing local fuel prices in line with movements in the global markets under its USD 3 bn loan agreement with the IMF.

Same again next month? The new prices will be in place at least until the beginning of next month when the pricing committee should meet to decide prices for 2Q. The committee was supposed to meet at the beginning of January to set prices for 1Q.

Inflation is already running red-hot: The headline rate of inflation hit its highest level since November 2017 in January as the impact of the EGP devaluation caused food prices to accelerate at a record rate.

The subsidy bill has risen significantly: The government’s fuel subsidy bill reportedly quadrupled in the first six months of the fiscal year due to the EGP’s devaluation against the USD and higher oil prices.

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