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Egypt raises fuel and electricity costs | Egypt raises fuel and electricity costs |
(about 5 hours later) | |
Egypt has introduced electricity and fuel price increases in a move to cut state subsidies and reduce the budget deficit. | Egypt has introduced electricity and fuel price increases in a move to cut state subsidies and reduce the budget deficit. |
Some fuel tariffs are reported to be increasing by 78% while electricity prices are expected to almost double within five years. | Some fuel tariffs are reported to be increasing by 78% while electricity prices are expected to almost double within five years. |
The government currently sells electricity for less than half its production cost. | The government currently sells electricity for less than half its production cost. |
Power cuts have become increasingly common in Egypt. | Power cuts have become increasingly common in Egypt. |
Officials say the high cost of subsidies has also led to the neglect of both maintenance and capacity expansion. | Officials say the high cost of subsidies has also led to the neglect of both maintenance and capacity expansion. |
In the run-up to the increases, ministers sought to calm fears that the increase in fuel and electricity prices would lead to sharp increases in the cost of food and transportation. | In the run-up to the increases, ministers sought to calm fears that the increase in fuel and electricity prices would lead to sharp increases in the cost of food and transportation. |
A graduated pricing structure for electricity aims to reduce the burden on the poor. | A graduated pricing structure for electricity aims to reduce the burden on the poor. |
On Thursday, Egyptian Minister of Supply Khalid Hanafi said he predicted only a "slight increase" in the price of staple goods. | On Thursday, Egyptian Minister of Supply Khalid Hanafi said he predicted only a "slight increase" in the price of staple goods. |
Analysts say Egypt's new government is expected to introduce a range of politically sensitive reforms to subsidies covering fuel, transport, food and agriculture. | Analysts say Egypt's new government is expected to introduce a range of politically sensitive reforms to subsidies covering fuel, transport, food and agriculture. |
The country's economy has been badly hit by more than five years of political unrest. | The country's economy has been badly hit by more than five years of political unrest. |
In the past financial year, the budget deficit was 14% of gross domestic product (GDP) and public debt exceeded 100% of GDP. | In the past financial year, the budget deficit was 14% of gross domestic product (GDP) and public debt exceeded 100% of GDP. |
Ousted President Mohammed Morsi failed to implement a $4.8bn (£2.8bn) loan from the International Monetary Fund (IMF) which would have unlocked another $12bn in bilateral loans. | Ousted President Mohammed Morsi failed to implement a $4.8bn (£2.8bn) loan from the International Monetary Fund (IMF) which would have unlocked another $12bn in bilateral loans. |
His reluctance to sign the deal was partly down to the austerity measures tied to it. | His reluctance to sign the deal was partly down to the austerity measures tied to it. |
These would have included reducing energy subsidies, cutting the public sector workforce and introducing a sales tax. | These would have included reducing energy subsidies, cutting the public sector workforce and introducing a sales tax. |
A quarter of Egypt's budget is accounted for by the country's 6.5 million public sector workers. | A quarter of Egypt's budget is accounted for by the country's 6.5 million public sector workers. |
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