Egyptian business tycoon Naguib Sawiris has commended Sunday the government’s decision to raise fuel and electricity prices. Yet, he called for fully implement cuts to subsidies allocated to energy-intensive industries.
On his Twitter account, Sawiris welcomed Sunday Mehleb-led government’s decision to slash spending on energy subsidies, describing such decisions as “momentous and uneasy”
He also added that it is the government’s turn to implement cuts to subsidies allocated to energy-intensive industries and to allow them to sell their products at international prices.
Egypt’s government raised the prices of fuel by up to 78% starting Saturday, July 5th , following on a promise to cut subsidies that eat up nearly a quarter of the state budget.
The price increases, in effect as of Friday midnight, follow a similar increase in electricity prices that were put in effect at the start of July.
Last week, Egyptian newly-elected President Abdel Fattah Al Sisi asked the government to amend the largest budget in Egypt’s history, at $115 billion, to reduce a budget deficit to 10% from 12%.
The amended budget featured a $6 billion (EGP 40 billion) reduction in the energy subsidy bill.
Sisi said he would need to tackle the tough issue and asked every Egyptian to be ready to sacrifice to help the country’s battered economy after three years of turmoil.
The fuel-price rise was highest for 80-octane gasoline, used mostly by old vehicles that still fill Egyptian streets, with the price soaring 78% to 22 cents a liter, or about 83 cents a gallon. The price of diesel fuel, used by most of Egypt’s public transport and trucks, increased 64% to 25 cents a liter. The price of 92-octane fuel increased by 40% to 37 cents a liter.
Energy and food subsidies eat up about a quarter of Egypt’s state budget. The country’s successive leaders hesitated about reducing them because half of the country’s 85 million people live at or below the poverty line of $2 a day and rely on government subsidies of wheat and fuel for survival.
