Cash-strapped Egypt raises prices for subsidized fuel

By Aydogan Kalabalik

CAIRO (AA) - Recent increases in subsidized fuel prices, coming on the heels of electricity price hikes, have contributed to a rising sense of popular discontent in Egypt, which continues to struggle with a moribund economy.

While the nation was celebrating the three-day Eid al-Fitr holiday -- and had its eyes on an Egypt-Uruguay world cup football match -- the government announced fresh price hikes on fuel ranging from 17 to 66 percent.

Large swathes of the public, along with Egypt’s political opposition, have decried the move, while government officials -- and the country’s vocal pro-government media -- have scrambled to defend it.

On Facebook, Khaled Ali, a leftist activist who ran unsuccessfully in Egypt’s 2012 presidential election, described the recent price hikes as “the result of bad financial choices for which the nation’s poor will pay the price”.

The increases have certainly had an impact on daily living costs, with the price of metro tickets immediately jumping from the equivalent of $0.16 to $0.22.

Due to Egypt’s current repressive atmosphere, the hikes were not met by any anti-austerity protests.

Nevertheless, Egyptians have registered their discontent on social media, especially Twitter and Facebook, creating hashtags and retweeting their criticisms.

Notably, the price hikes were one of the very first acts of a new government drawn up earlier this month by freshly-appointed Prime Minister Mustafa Madbouli.

Government officials, for their part, insist that the hikes are an economic “necessity”.

Finance Minister Mohamed Maeet said the decision was taken with a view to reducing state subsidy costs.

The hikes have led to an increase of per-liter petroleum prices from $0.28 to $0.37 -- a rise of 37 percent.

The price of high-octane fuel, meanwhile, which is widely used by taxis and minibuses, jumped by a whopping 50 percent, as has the price of diesel fuel.

During the era of former President Hosni Mubarak, who ruled Egypt from 1981 to 2011, the state heavily subsidized several “strategic” commodities, including electricity, fuel, cooking oil and bread.

Under current President Abdel Fattah al-Sisi, who came to power in 2014, the state has vigorously attempted to reduce subsidy costs.

In 2016, the International Monetary Fund approved a $12-billion loan request by Egypt on condition that Cairo raise taxes and reduce government subsidies.

*Ali Murat Alhas contributed to this story in Ankara