The Egyptian government decreased the support of petroleum products by 46 per cent in the first quarter of the current fiscal year 2020-2021. On Sunday, the Egyptian Minister of Petroleum Tarek el-Molla said that petroleum products’ subsidies fell to EGP 3.9 billion ($249.8 million) in the first quarter. In a press statement, el-Mulla added that the budget had estimated support at EGP 7 billion ($448 million), compared to EGP 7.25 billion ($464 million) a year ago.
The Ministry of Finance is aiming for petroleum subsidies for the current fiscal year to reach EGP 28.193 billion ($1.8 billion). Fuel prices have witnessed five big jumps, ranging from 13 per cent to 305 per cent, from July 2014 until now. Since coming to power through a military coup in mid-2013, Egyptian General Abdel Fattah al-Sisi has sought to reduce energy subsidies (oil and electricity) and supplies in an attempt to reduce the worsening budget deficit.
Experts warn of the repercussions of the decision to raise fuel prices, in addition to other austerity measures, on the resurgence of inflation, deepening economic recession, and the erosion of the middle class.