A source in the Ministry of Petroleum and Mineral Resources revealed that the Automatic Pricing Committee for Petroleum Products, which is concerned with reviewing and setting the selling prices of some types of fuel in Egypt on a quarterly basis, will announce new prices for gasoline during the next two days. A meeting of the committee was scheduled to be held before mid-January to determine the new prices for fuel for the next three months, but the rapid fluctuation in the current oil prices was the reason for postponing it.

The government had implemented three consecutive increases in gasoline prices during April, July, and October of 2021. Thus, a litre of gasoline 80 became at a price of 7 pounds, a litre of gasoline 92 at a price of 8.25 pounds, a litre of gasoline 95 at a price of 9.25 pounds, and a litre of diesel at 6.75 pounds.

The latest increase was the eighth since President Abdel Fattah al-Sisi took office in 2014. The price of a litre of Octane 80 increased from 0.8 to 7 pounds per litre, an increase of more than 740%, and Octane 92 increased from 1.85 to 8.25 pounds, an increase of more than 330%. In 2019, the government began applying an automatic pricing mechanism to a number of petroleum products, after liberalizing their prices within a program that is implemented to gradually eliminate subsidies for these products. The price equation states that gasoline prices are adjusted every three months, not exceeding 10% of the selling price in the local market, based on three main factors: the global price of a barrel of oil, the Egyptian pound exchange rate against the US dollar, and the amount of change in cost components.

The Egyptian authorities had imposed a tax on petroleum products, with the aim of fixing the selling price locally in the event of a decline in international fuel prices. Petroleum subsidies in Egypt’s general budget have declined by more than 87% during the past four fiscal years. In the budget for the fiscal year 2021-2022, subsidies for petroleum products decreased from 28.19 billion pounds to 18.41 billion pounds, a reduction of 35%, while it amounted to 145 billion pounds in the 2017-2018 budget.