CAIRO (AP) — The Egyptian government increased fuel prices by nearly three percent on Friday, as global inflationary pressures spike in the wake of Russia’s war on Ukraine.
The move is expected to exacerbate economic pressures on the country’s ailing middle class, which has been hit hard in recent years by austerity measures dictated by the government’s ambitious economic restructuring program.
The new prices were announced on the cabinet’s Facebook page and came into effect Friday morning. The price of 95 octane gasoline increased to 9.75 Egyptian pounds ($0.53) per liter from 9.5. Meanwhile, the cost of 92 octane rose to 8.75 from 8.5, and 80 octane rose to 7.5 from 7.25.
The government left unchanged the prices of diesel, which is the main fuel used to transport goods and commuters.
Fuel prices hikes are expected to reflect inflation rates, which already jumped from 10 percent in February to 12 percent in March, according to the state-run statistics bureau.
Last month, Egypt’s Central Bank raised its key interest rate for the first time since 2017 to contain soaring inflation. The move saw the Egyptian pound slip, trading at over 18 to the dollar up from an average of 15.6 pounds for $1.
The war in Ukraine has shaken the global economy and threatened food supplies and the livelihoods of people across the world. Last month, Brent crude oil hit a record high of $140 per barrel before lately coming down to nearly $112.
Like many emerging markets, Egypt also witnessed capital outflows in the wake of the war, which brought the country’s net foreign reserves down to $37.082 billion by the end of March, compared to $40.99 billion in February.
In a bid to stabilize the Egyptian economy, Saudi Arabia, Qatar and the United Arab Emirates pledged a total of $22 billion in the form of deposits and direct investments. The Arab world’s most populous country has also reached out to the International Monetary Fund for assistance, although it remains unclear whether a fresh loan was requested.