Egypt intends to increase the price of 95 octane gasoline in March with plans to announce the pricing mechanism by the end of December, a senior Egyptian official source told Bloomberg.
“That grade of gasoline is one which is no longer subsidized. It also plans to announce the mechanism for the other grades in June, after lifting the subsidies, to implement the move in September,” the official clarified.
The official referred to the delay of receiving the fifth installment of a 12-billion International Monetary Fund (IMF) for a month, attributing the delay to talks over some elements of the government’s economic program.
According to the source, IMF insisted on the timing of the announcement about the fuel pricing mechanism, as one of the main issues discussed. “The mechanism links local fuel prices to international ones, and is a key part of the government’s plans to cut costs.”
As per schedule, Egypt should have received the fifth tranche in December after IMF’s Executive Board reviewed Egypt’s economic reform program and offered Egypt the fifth settlement of the IMF’s $12 billion extended fund facility arrangement, amounting to $2 billion.
By receiving the fifth installment, the total disbursements under the program will reach about $10 billion.
In October, IMF reached a staff-level agreement with the Egyptian government to offer Egypt the fifth settlement of IMF’s $12 billion extended fund facility arrangement.