Egypt increases fuel prices following depreciation of local currency

It’s no longer news that the economic system of the world is perilous to the extent that the Egyptian government raised fuel costs on Friday 22nd March 2024, in a move that will undoubtedly compound inflationary tensions on a generally striving population.

The new costs were declared on the Bureau’s Facebook page and became effective this Friday 22nd March 2024 morning. The cost of diesel, the primary fuel for transport of individuals and merchandise, rose from 8.5 Egyptian pounds ($0.18) to 10 pounds ($0.21) per liter.

Egypt, a net importer of energy, expanded the cost of 95 octane fuel to 13.5 Egyptian pounds ($0.29) per liter from 12.5 pounds ($0.27).

The government claimed that the rises were caused by the global rise in energy prices following the Red Sea turmoil and the increased cost of importing energy as a result of the local currency’s depreciation.

It was reported on the 6th of March 2024, Egypt’s Central bank reported the reception of a market-based conversion standard after almost an extended time of protecting an over-esteemed local currency, which coincidentally stimulated an equal market.

The pound’s true rate tumbled from almost 31 to 51 for each U.S. dollar prior to valuing by almost 10% lately as the financial area started getting huge inflows of unfamiliar cash, as indicated by the government.

The widely used butane gas cylinders were also increased in price by the government, going from 75 Egyptian pounds, or $1.61, to 100 Egyptian pounds, or $2.14. Last year, a cabinet member said Egyptians consume around 800,000 butane chambers a day, half of which are imported.

The fuel price hikes are expected to further affect consumer purchasing power and inflation rates. Last month, the annual urban inflation rate jumped to 35.7% from 29.8% in January. The cost of food alone increased nearly 51% in February from a year earlier. The cost hikes are in accordance with conditions set by the International Monetary Fund for the payment of additional loads to Egypt.

After lengthy negotiations, Egypt and the IMF agreed earlier this month to raise the bailout from $3 billion to $8 billion.

Finally Egypt received a lifeline last month February, 2024 when the United Arab Emirates announced a $35 billion investment project along its Mediterranean coast.

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