Egypt to freeze domestic fuel prices for a year after latest hike

Egypt will freeze domestic prices of fuel for at least a year after its latest increases on Friday, the petroleum ministry said in a statement.

The country raised prices on a wide range of fuel products on Friday, its official gazette said, marking the second increase this year, in line with government policies to reduce subsidies and ease a budget deficit.

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The increases of 10.5 per cent to 12.9 per cent on a wide range of petroleum products followed a hike of nearly 15 per cent in April. Egypt recently said it hoped that would be the last major rise in fuel prices, assuming global markets stayed stable.

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Prices for diesel, one of the most commonly used fuels in the country, were raised by 2 Egyptian pounds ($0.0421) to 17.50 pounds per litre from 15.50 pounds.

Egypt remained committed to lowering its energy subsidies and bringing domestic prices in line with actual costs by December as it works to reduce a wide current account deficit, the International Monetary Fund said in March. The government said it would continue to subsidise diesel, even if that required raising prices of other fuels above cost to help cover the subsidy.

The IMF has pushed the government to cut fuel, electricity and food subsidies while expanding social safety nets under an $8 billion loan.

In the second quarter, Egypt's current account deficit stood at $2.2 billion, with imports of oil products rising to $500 million from $400 million a year earlier, according to data from the country's central bank.

Gasoline prices increased by as much as 12.9 per cent, depending on the grade, with 80 octane gasoline rising to 17.75 pounds per litre, while 92 octane rose to 19.25 pounds and 95 octane increased to 21 pounds.

($1 = 47.5500 Egyptian pounds)