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Saturday, November 26, 2022

Egypt hikes fuel prices amid global inflationary pressures

Cairo ( Associated Press) — The Egyptian government raised fuel prices by nearly three percent on Friday, as global inflationary pressures mount in the wake of Russia’s war on Ukraine.

The move is expected to increase economic pressure on the country’s ailing middle class, which has been hit hard in recent years by austerity measures set by the government’s ambitious economic restructuring programme.

The new prices were announced on the cabinet’s Facebook page and came into effect from Friday morning. The price of 95 octane gasoline rose from 9.5 to 9.75 Egyptian pounds ($0.53) per liter. Meanwhile, the price of 92 octane increased from 8.5 to 8.75, and the price of 80 octane increased from 7.25 to 7.5.

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The government has not changed the prices of diesel, which is the main fuel used to transport goods and passengers.

According to the state-run Bureau of Statistics, the increase in fuel prices is expected to reflect the rate of inflation, which already rose from 10 per cent in February to 12 per cent in March.

Last month, Egypt’s central bank raised its key interest rate for the first time since 2017 to curb rising inflation. The move slipped the Egyptian pound, which was trading at more than $18 from an average of 15.6 pounds.

The war in Ukraine has rocked the global economy and put the food supply and livelihoods of people around the world at risk. Last month, Brent crude oil hit a record high of $140 a barrel and recently settled at around $112.

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Like many emerging markets, Egypt also saw capital outflows in the wake of the war, reducing the country’s net foreign reserves to $37.082 billion at the end of March, from $40.99 billion in February.

To stabilize Egypt’s economy, Saudi Arabia, Qatar and the United Arab Emirates pledged a total of $22 billion in deposits and direct investments. The Arab world’s most populous country has also reached out to the International Monetary Fund for aid, although it is unclear whether the new loan was requested.

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