A Finance Ministry official said the government intends to save LE15 billion by raising prices of certain petroleum products and another similar amount by launching the smart cards system that it believes would rationalize fuel consumption and prevent smuggling.
Speaking on condition of anonymity, the official said the government would raise the price of the 92 octane fuel and the diesel fuel by LE0.4 and LE0.6 per liter, a range between 22 percent and 54 percent, as well as the price of natural gas supplied to factories by US$1.5 per million thermal unit.
The official did not specify a date for the price raise but said it would depend on the political condition.
Finance Minister Hani Qadri Demian had said in a statement on Monday that the government reduced subsidies of petroleum products in the budget of the 2014-2015 fiscal year from LE134.3 billion to LE104 billion, a reduction of LE30 billion.
This government will resign after the inauguration of the new president, but President Adly Mansour will still endorse the budget.
The price of a liter of diesel fuel is now LE1.1, an 80 octane gasoline LE0.9 and a 92 octane gasoline LE1.85.
A senior official at the Petroleum Ministry said prices would be raised over five years to reach breakeven levels.
The government expects a deficit of US$40.4 billion in next fiscal year’s budget, the equivalent of 12 percent of GDP, which is the same as in this fiscal year’s budget despite US$20 billion received in aid from the Gulf states.
The official added that the price of a liter of diesel fuel is LE4.75 and a liter of gasoline is LE4, compared to the world prices of LE5.75 and LE5 respectively, while the price of a liter of 95 octane gasoline is LE5.85 versus the world price of LE7.
Edited translation from Al-Masry Al-Youm
