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IMF: Egypt will again raise fuel prices on that date, according to the Al-Wasat newspaper website, which contains IMF news: Egypt will again raise fuel prices to this date.
19659003] The Egyptian government promised the IMF to raise fuel prices by June 15, 2019, to reach the cost price. "From here June 15, 2018, we will increase the price of fuel to reach 100% of the cost," the government said in the IMF report on the third review of the economic reform program announced Thursday.
The government has excluded the prices of natural gas and fuel oil used in the production of electricity and bakeries, with the objective of reaching 100% of the cost price at that date.
The government increased fuel prices in June by an average of 44%, after raising gasoline and diesel prices in June 2017 by 53%, as well as natural gas and kerosene prices. and diesel respectively of 100, 55 and 40%.
After the recent increase in June 2018, the retail price of fuel to consumers was approximately 73% of the actual pre-tax cost for gasoline, diesel, kerosene and diesel, excluding diesel fuel. fuel oil used in the production of electricity and bakeries. Now.
The government said it would continue to subsidize energy, increasing electricity prices by an average of 30 percent in July 2016, and then by 40 percent by July 2017.
Electricity prices rose 26% in early July, and will continue to rise to reach cost, by 2020-2021.
On June 16, the government announced an increase in oil prices between 17.4% and 66.7%, which contributed to the rise in inflation in June.
According to the third audit report, the Prime Minister agreed in June to approve an automatic fuel pricing mechanism, designed on the basis of the latest international experiences.
The government stated that the mechanism was designed to maintain cost recovery rates and protect the budget from fluctuations in the exchange rate and world oil prices.
According to the document, this mechanism concerns all petroleum products (petrol, diesel, kerosene and diesel), with the exception of diesel fuel used for electricity production and bakeries.
This mechanism will be put in place in December 2018, the government said in the third audit reports.
The government said that it could begin to apply this mechanism to benzene 95, in advance, but the start date depends on the evolution of the international crude oil market.
"We will continue to publish quarterly information on the cost of fuel subsidies and the impact of the subsidy bill on the public budget," she said.
According to the Fund's document, the government will launch a community party to introduce people to the new fuel system and how it works.
The Government added that the mechanism would ensure a formula to avoid sharp fluctuations in fuel prices in the event of significant changes in the price of crude oil or the exchange rate.
"This may provoke a temporary resurgence of support, and we are ready to take the necessary financial measures to achieve our goals," she said.
The government stated that current prices in the areas of crude oil, electricity and gas, excluding natural gas, are economically inefficient and misdirected, and it encourages excessive energy consumption.
According to the Government, it favors activities that require capital-intensive rather than labor-intensive activities, which hampers private investment in this sector and leads to heavy loads.
"We are on the right track to phase out untargeted subsidies and improve the efficiency of the private sector in these goals," according to the government.
Egypt is one of the cheapest fuel price countries
The IMF said in its third audit report that "the subsidy reform at the same time". energy continues to play a major role in the consolidation of public finances ".
The fuel subsidy bill went from 3.3% of the world's gross domestic product (GDP) in 2016/2017 to 2.7% of GDP in the previous year, falling to 1.8% % of GDP per year Financial Implications
The IMF said that this decline is due to the significant increase in the price of crude oil in the world during the previous year.
According to the fund, despite significant increases in fuel prices since the beginning of the program, fuel prices in Egypt remain among the lowest in the world.
The IMF said it benefited the rich disproportionately, not the poor.
The government should implement an additional fuel price increase by the end of the current fiscal year, to arrive at the cost price.
According to the Fund, the fuel pricing mechanism, which will be implemented by December, is designed to achieve cost price, protect the budget against unforeseen changes in the rate of foreign exchange and world oil.
The IMF has raised its forecasts for the energy subsidy bill this year, from 65.6 billion pounds to 115.1 billion pounds, while the government aims to reach around 89 billion pounds.
The Fund stated that the energy subsidy bill would rise to 52.8 billion pounds by 2019 2020
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