PM: Fuel price hike part of economic reform system

Cairo - The recently-taken decision to increase fuel prices is part of Egypt's economic reform system, Egyptian Prime Minister Sherif Ismail said.

It was necessary to take this decision to ensure that subsidy is delivered to those who deserve it, the premier said at a press conference on Thursday.

This move comes as part of the government's bids to provide high quality services to citizens, he added.

It was necessary to increase the fuel prices, otherwise the subsidy of petroleum products would hit 150 billion pounds, Ismail said.

Egypt's total subsidy is expected to reach 333 billion pounds in the 2017-2018 fiscal year compared to 270 billion pounds in the current fiscal year, the premier noted.

Ismail revealed the government's plan to decrease the budget deficit to 9.1 per cent from the current 10.8 per cent.

He said the government also seeks to reduce public debt to 95% of the gross domestic product in the new budget.

The single butane gas cylinder costs the state 115 pounds, while the citizen pays only 15 pounds to get it, so it necessary to increase its price to 30 pounds, the prime minister added.

For his part, Petroleum Minister Tarek El-Molla told Reuters the price of 92-octane gasoline had been put up by more than 40 percent to 5 Egyptian pounds ($0.2767) from 3.5 pounds per litre. Diesel and 80-octane - the most commonly used fuel categories - rose more than 50 percent to 3.65 pounds per litre from 2.35 pounds.

The government also increased the price of cooking gas cylinders - used mostly by poorer Egyptians - by 100 percent to 30 pounds ($1.66) from 15 pounds per cylinder.

Molla said the total subsidies for petroleum products in 2017-2018 would fall to 110 billion Egyptian pounds ($6.09 billion) from 145 billion pounds ($8.02 billion).