By Ebi Kesiena
Egyptian authorities have disclosed plans to completely lift fuel subsidies by the end of 2025, according to a statement by government spokesperson Mohamed El-Homossani on Wednesday.
El-Homossani highlighted that the state currently bears a substantial cost for subsidizing both fuel and electricity. During an interview, he explained that the electricity sector receives natural gas and mazut at prices below their actual cost to operate power plants.
Prime Minister Mostafa Madbouly has mandated a four-year plan to implement the subsidy elimination conditions that were in place from 2016 to 2021, El-Homossani said.
In the current budget, which began on July 1, 2023, subsidies for octane, diesel, and other petroleum products amount to approximately EGP 119.419 billion, marking an increase of about EGP 61.325 billion.
El-Homossani also noted that while the state will continue to subsidize bread, there will be a slight price increase. He reassured the public that “the price adjustment will be minimal and will not affect citizens.” Currently, a subsidized loaf is sold for PT5, though it costs the state EGP 1.25, placing a significant burden on the budget.
El-Homossani mentioned that replacing in-kind subsidies with cash assistance is a proposal from several experts. This proposal will be discussed in a national dialogue soon and will require societal consensus for adoption.
El-Homossani’s remarks follow Prime Minister Madbouly’s announcement on Monday regarding the reduction of bread and fuel subsidies.
