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[size=36]Egypt cuts fuel subsidies as it approaches the end of the IMF program[/size]
Economy | 09:54 - 06/04/2019
Following
a review of a $ 12 billion loan program for Egypt over three years, it will eliminate subsidies on most energy products by June 15, the IMF said on Saturday.
The letter, dated January 27, said this meant a rise in the price of gasoline, diesel, kerosene and fuel oil, currently 85 to 90 percent of its global price.
The letter, sent by the Minister of Finance and the Governor of the Central Bank of Egypt, came as part of an IMF staff report on January 28 and was published following the disbursement of the fifth installment of 6 installments of the loan in February.
The loan program began in 2016 and is linked to reforms that included a sharp devaluation of the Egyptian pound and the introduction of VAT.
The commitment to achieve full cost recovery by cutting subsidies does not include liquefied petroleum gas (LPG) and fuel oil used to generate electricity and bakeries, the letter said.
The government said in its letter that after the introduction of the world's lowest-priced gasoline-octane gasoline, which began in April, similar pricing mechanisms will be applied to other products in June with the first price adjustments expected in mid-September.
The Government indicated that it had also implemented a hedging mechanism to prevent shocks to oil and other commodities
a review of a $ 12 billion loan program for Egypt over three years, it will eliminate subsidies on most energy products by June 15, the IMF said on Saturday.
The letter, dated January 27, said this meant a rise in the price of gasoline, diesel, kerosene and fuel oil, currently 85 to 90 percent of its global price.
The letter, sent by the Minister of Finance and the Governor of the Central Bank of Egypt, came as part of an IMF staff report on January 28 and was published following the disbursement of the fifth installment of 6 installments of the loan in February.
The loan program began in 2016 and is linked to reforms that included a sharp devaluation of the Egyptian pound and the introduction of VAT.
The commitment to achieve full cost recovery by cutting subsidies does not include liquefied petroleum gas (LPG) and fuel oil used to generate electricity and bakeries, the letter said.
The government said in its letter that after the introduction of the world's lowest-priced gasoline-octane gasoline, which began in April, similar pricing mechanisms will be applied to other products in June with the first price adjustments expected in mid-September.
The Government indicated that it had also implemented a hedging mechanism to prevent shocks to oil and other commodities
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