5 July 2014, 11:09

Egypt gov't dramatically raises fuel, electricity prices

Egypt gov't dramatically raises fuel, electricity prices

Egypt's government dramatically raised the prices of fuel and electricity as part of a five-year plan to reduce subsidies that would see prices double within five years, officials said in comments reported by the state news agency.

According to Reuters Mohamed Shaker, the electricity minister, said the average price for a kilowatt hour, currently at around 0.23 Egyptian pounds ($0.03), would reach almost 0.51 pounds after gradual increases over five years.

The fuel prices was raised starting from midnight on Friday. This measure has followed an increase in electricity prices that were put in effect at the start of July.

The Cabinet this week amended the government's budget to reduce a staggering deficit.

The former military chief Abdel-Fattah al Sissi, elected as new president last month, has said he will need to tackle the tough issue and asked every Egyptian to be ready to sacrifice to help the country's battered economy after three years of turmoil.

Al Sissi also asked the government to amend the largest budget in Egypt's history, at $115 billion, to reduce a budget deficit from 12 to 10 percent, Associated Press reports.

The amended budget featured a $6 billion reduction in the energy subsidy bill, government officials said.

Reuters reports, that Khaled Hanafi, Egypt's supplies minister, confirmed the cuts on private television channel Sada al-Balad. According to him the fuel price rise was highest for 80 octane gasoline, used mostly by old vehicles that still fill Egyptian streets, with the price jumping 78 percent to 22 cents per liter. Diesel fuel, used by most of Egypt's public transport and trucks, increased 64 percent to 25 cents a liter. The 92 octane increased by 40 percent to 37 cents a liter.

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