Austerity Measures: Egypt slashes fuel subsidies
The government first increased fuel prices in 2014
PHOTO: REUTERS
CAIRO:
Egypt announced a new sharp increase in fuel prices on Thursday after slashing government subsidies in a tough IMF-backed reform programme. The government first increased fuel prices in 2014 and again in November last year after floating the pound. Prime Minister Sharif Ismail said fuel subsidies were straining government financing. “The projection for next year at the same levels is 150 billion pounds,” he said in a press conference, adding that neither the oil sector nor government resource could finance the bill. The country has spent billions of dollars propping up the pound, which rose from 8.9 pounds per dollar to 18 after its flotation. Investors and international lenders have applauded the reforms but the measures have fuelled inflation, which now hovers around 30%.
Published in The Express Tribune, June 30th, 2017.
Egypt announced a new sharp increase in fuel prices on Thursday after slashing government subsidies in a tough IMF-backed reform programme. The government first increased fuel prices in 2014 and again in November last year after floating the pound. Prime Minister Sharif Ismail said fuel subsidies were straining government financing. “The projection for next year at the same levels is 150 billion pounds,” he said in a press conference, adding that neither the oil sector nor government resource could finance the bill. The country has spent billions of dollars propping up the pound, which rose from 8.9 pounds per dollar to 18 after its flotation. Investors and international lenders have applauded the reforms but the measures have fuelled inflation, which now hovers around 30%.
Published in The Express Tribune, June 30th, 2017.