Egypt’s fuel pricing committee will meet later this month to approve a likely increase in fuel prices, according to a senior ministry of petroleum official who spoke to Al Manassa. This comes as the government presses ahead with subsidy cuts under its IMF-backed reform plan.
The official, speaking to Al Manassa on condition of anonymity, said the Egyptian General Petroleum Corporation (EGPC) has completed its pricing review and will deliver its report to the committee next week.
A hike of 12% to 17% is under discussion for certain fuel products as Cairo moves to align local prices with actual production and import costs.
“We are close to full cost recovery for gasoline,” the official said. “Subsidies on diesel will remain partial, given its critical role in transportation and essential services.”
The committee is weighing whether to implement a single increase of more than 15% or stagger the hikes over two phases—one this month and another in January 2026.
The official noted the first scenario is more likely, citing Brent crude’s recent slide to $66 a barrel, well below the $80 benchmark in the state budget.
Egypt has already raised fuel prices four times since early 2024, most recently in April. The cuts are part of a broader strategy to shrink the fiscal burden of energy subsidies, a central plank of Egypt’s IMF commitments.
Exchange rate shifts also factor heavily into the formula. The pound recently strengthened to 48.19 per dollar, compared with the budget baseline of 50, providing the state with limited fiscal breathing space.
Gasoline subsidies on empty
Medhat Youssef, former deputy head of EGPC, told Al Manassa the next increase would likely mark the end of gasoline subsidies. “Exchange rate gains and lower oil prices help neutralize the public impact,” he said. Diesel subsidies, however, are expected to remain due to their direct role in freight, commerce, and essential services.
Youssef also pointed out that liquified petroleum gas cylinders will remain subsidized, given their centrality to average household use.
Hafez El-Selmawy, former head of Egypt’s electricity regulator, said surging summer demand for fuel oil and diesel in power stations has driven up import costs. “The Petroleum Authority has had to absorb these extra costs and is now looking to recoup part of them,” he said. He added that seasonal spikes in electricity consumption place extra strain on the subsidy budget.
Inflation risk ahead
Egypt’s annual inflation eased to 11.2% in August, marking a third straight monthly decline. Analysts caution, however, that a fresh fuel price hike could stall or even reverse that trend.
“The macro outlook is improving,” said the petroleum ministry source. “But we must remain responsive to global shifts. The automatic pricing mechanism will stay in place.”
