Egypt raises fuel prices as part of IMF-backed reforms

CAIRO — Egypt announced on Thursday a 15-per cent increase in petrol prices, part of a reform package requested by the International Monetary Fund (IMF) to proceed with a $5 billion loan to the cash-strapped government. 

The Egyptian petroleum ministry said the price hike would come into effect on Friday. 

The announcement comes ahead of an IMF meeting on Monday to review the April payout package, unlocking $820 million in funds after Cairo received another such tranche of the loan in late June. 

Egypt is suffering its worst ever economic crisis, with ballooning foreign debt driving up inflation and resulting in several consecutive devaluations of the local currency against the dollar.

Inflation peaked at nearly 40 per cent last year, before winding down to 27.5 per cent in June.

The IMF has demanded wide-ranging reforms, most notablyadopting a liberal exchange

regime as well as limiting government spending and incentivising private investment.

Alongside the economic crisis, Egypt has also been caught in regional tensions, with bloody wars raging in neighbouring Gaza and Sudan.

Attacks by Yemen's Iran-backed Houthi rebels on shipping around the Red Sea have also hit revenues from Egypt's Suez Canal, recording

a 23.4-per cent drop in the 2023-2024 fiscal year compared to the previous one.

The key waterway, which connects Asia to Europe, normally carries about 12 per cent of global maritime trade.