Egyptians are awaiting new increases in fuel prices as the government returns to completing the measures to cut fuel subsidies by the end of this March, as confirmed by Egyptian Prime Minister Mostafa Madbouly during the press conference held by the Cabinet on Wednesday, 12 March, at the Cabinet’s headquarters in the New Administrative Capital.

The government aims to close the file of lifting subsidies on fuel and energy prices by the end of the current year, with the lifting of subsidies to be gradual, leading to the complete elimination of subsidies by the end of 2025. Meanwhile, the Prime Minister explained in his speech that there would be cross-subsidisation between products and that the butane gas cylinder would remain subsidised.

This step comes within the framework of Egypt’s commitments to the International Monetary Fund, which, in its latest review, made the restructuring of subsidies a condition to ensure the efficient distribution of financial resources. The IMF Executive Board had approved, on 11 March, the disbursement of the fourth tranche of Egypt’s loan, worth $1.2 billion, and also approved the authorities’ request to obtain additional financing worth $1.3 billion from the Resilience and Sustainability Facility, to be disbursed in tranches rather than in a single tranche.

During the period from 2013 to 2020, fuel and energy prices rose six times. By contrast, 2015 and 2020 saw stable prices, as shown in the following figure:

During 2021, fuel prices rose three consecutive times within the same year, as shown in the following figure:

As for 2023, fuel prices rose twice, in the first quarter of the year and in the last quarter, while in the second quarter of the year petrol prices were held unchanged and the price of diesel was raised by one pound.

Zohdy El-Shamy, a politician and economic researcher, believes that the successive increases in fuel and energy prices are the result of the government having mortgaged Egypt to the International Monetary Fund and failing to free itself from its control; rather, it remains subject to it, in a situation considered an exception among the countries of the world.

He adds, speaking to Zawia3, that the Egyptian government is trying to delude citizens into believing that this is normal, but in reality it is an abnormal situation resulting from its failure and its pursuit of economic policies that are destructive to the Egyptian people.

The economic researcher denounces the rise in fuel prices more than 10 times in recent years, with the government raising them nearly three times in 2024 alone. He points out that the Egyptian government does not realise what it is doing, as it is a captive of the International Monetary Fund and does not take into account the suffering of the Egyptian people. He stresses that the negative damage resulting from these systematic policies will lead to the destruction of the economy, as a result of remaining under the umbrella of the International Monetary Fund and insisting on these policies.

El-Shamy explains that the economic decisions taken by the Egyptian government, such as devaluing the currency and lifting subsidies, lead to chain increases in prices that do not seem to have an end. These policies imposed by the International Monetary Fund constitute a crime against the Egyptian people and work to destroy them. He points out that the effects resulting from this recklessness will increase the social pressure, which is already in a state of great tension because of the deterioration of living conditions.

During the past year, diesel prices jumped to reach EGP 10, and the price of a butane gas cylinder reached EGP 100. Meanwhile, the price of natural gas for vehicles reached EGP 7, after its prices rose more than ten consecutive times during the period from 2013 to 2024. As shown:

Energy and the Poor

In August 2024, the International Monetary Fund announced that Egypt might abandon quarterly fuel price increases in exchange for a firm commitment to raise prices to “cost-recovery levels” by the end of 2025.

The official spokesperson for the Egyptian Cabinet, Ambassador Mohamed El-Homsany, had said in televised statements that the state is “continuing its efforts to complete the economic reform project”, explaining that “rationalising subsidies is among the government’s priorities to ensure that they reach those entitled to them”.

He explained that “the process of lifting subsidies will be carried out gradually and in a balanced manner, with subsidies continuing on some petroleum products, so that the cost of some petroleum products is covered through the pricing of other products, in order to keep the level of diesel prices at a balanced limit, given its direct impact on many services”.

El-Homsany stressed that the government is “continuing to subsidise diesel and butane even after the end of the fiscal year, because they directly affect the prices of goods, especially those that matter to people on limited incomes”.

For her part, Mona Ezzat, a researcher in economic and social rights, believes that regardless of the gradual phase the government has announced for lifting energy subsidies, doing so without controlling prices and markets will lead to a huge rise in prices and an increase in inflation rates, which have already been high in recent years, resulting in a decline in citizens’ purchasing power.

Ezzat explains, in her conversation with Zawia3, that despite the talk of taking people on limited incomes into account, and that the subsidy on diesel will not be lifted by large percentages, all these measures will not limit the negative effects on citizens unless real measures are taken to control the markets, which will cause terrible price rises. She asks: who will bear this burden? She points out that the coming crisis will be a storm at all levels, especially for citizens on limited incomes and the middle class.

The researcher in economic and social rights continues that lifting subsidies within a few months will coincide with several occasions, such as the Eids and the start of the new school year, times in which most Egyptian families live in a state of emergency, which means that these decisions will have negative effects on Egyptian families, as the middle class may slip down to lower brackets, and poor families will become poorer.

She notes that these measures will reduce the gains citizens have achieved, whether in terms of higher wages, the social package recently announced by the Egyptian government, or the financial support allocated to irregular workers. All these gains will evaporate as a result of the rise in prices caused by the gradual lifting of fuel subsidies, which will lead to a severe deterioration in the conditions of Egyptian families.

Ezzat explains that lifting subsidies on fuel and energy means a wave of price rises that will extend over long periods, because the scale of the subsidy removal is large, and this will lead to a wave of inflation with extremely serious social and economic effects. She points out that people on limited incomes or irregular workers will be the most affected, as they may lose their projects or small economic activities, which were heavily affected during the coronavirus crisis and the successive price rises and have not yet recovered; and with the coming wave of price rises, these groups will face difficulty in continuing their economic projects, which will lead to the loss of their source of livelihood.

For example, street vendors who buy from retailers will find that rising prices threaten their profit margin, and with continuing price rises, the profit margin will be threatened with a further decline, which means that some of them may lose their jobs in the hope of finding other opportunities that achieve a higher profit margin to meet their families’ needs, according to Ezzat.

As for the lower brackets of the middle class, Ezzat says that they rely heavily on borrowing and savings associations, buying their basic needs in instalments, such as school fees. Consequently, such decisions will make them face difficulties in meeting their basic needs. She points out that with the “Takaful and Karama” programme, which gives women money to educate their children, women will find themselves forced to spend this money to meet their basic needs, such as food, instead of directing it to education, which is the main objective of the programme. This will threaten the stability of these families, as they will find themselves forced to meet other basic needs before turning to education.

The researcher in economic and social rights concludes her remarks by saying that the Egyptian government has not taken all the economic and social dimensions into account. Talk of wage increases with the new budget will not be enough to counter the lifting of subsidies within a short time, as the effects of inflation and rising prices will devour these increases.

More Inflation and Impoverishment

Mohamed Ramadan, an economics researcher at the Egyptian Initiative for Personal Rights, believes the inflation rate will certainly be affected by the expected increases in fuel and energy prices, in addition to the increase in the cost of goods and, consequently, in prices.

He explains, speaking to Zawia3, that the inflation resulting from the flotation is supposed to have begun to recede, but so far there is no precise date for its end, since it depends on the end of the dollar liquidity crisis from which the Egyptian market suffers.

On the question of parity between the minimum wage and the expected rise in prices, the economic researcher explains that the issue is not only about parity; the more important question is: where is the minimum wage applied? In recent years, the government raised the minimum wage from EGP 2,000 to EGP 7,000, but even the government itself does not apply the minimum wage to workers on temporary contracts inside government factories and companies and the public sector. He points out that Egypt is one of the countries in which 7 out of every 10 workers work without formal contracts, especially in the private sector; for these workers, neither a minimum wage nor social insurance nor any other rights apply.

Ramadan believes that raising the minimum wage is a means of moving the maximum for employees and permanent workers in the government and in the higher grades, while the minimum is not applied to most workers, and the government has no actual mechanisms to apply it.

The economic researcher explains that the Egyptian government always defends low wages on the pretext that Egyptian families can live on them, but reality says the opposite. If we compare the situation more precisely, we find that in 2020 the dollar was selling for EGP 16 and the minimum wage was EGP 2,000, which means that the minimum was equal to $125.

Today, however, the dollar has exceeded EGP 50, and the minimum wage has become EGP 7,000, which means that the minimum is equal to only $140 a month. Thus, the minimum wage has not risen as the Egyptian government claims. On the contrary, the increase is very small compared with inflation rates in Egypt in recent years, which means that the value of wages is actually declining because of the fall in the value of the currency against the dollar and weak purchasing power resulting from high inflation, which is expected to remain high in the coming period, according to Ramadan.

The monthly rate of change in the general consumer price index for urban areas, announced by the Central Agency for Public Mobilisation and Statistics (CAPMAS), recorded 1.4% in February 2025, compared with 11.4% in February 2024 and 1.5% in January 2025. On an annual basis, the headline urban inflation rate recorded 12.8% in February 2025, compared with 24.0% in January 2025. Inflation reached its highest level ever, at 38%, in September 2023.

Editorial correction: The first version of the report stated that Prime Minister Mostafa Madbouly’s press conference was held on Wednesday, 15 March; in fact, it was held on Wednesday, 12 March 2025.

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