CAIRO: Egypt says it plans to increase diesel fuel and natural gas subsidies by 50 percent in the financial year that begins on July 1, the state news agency MENA reported on Wednesday.
The country’s cash-strapped military-backed interim government has come under tremendous pressure to improve the quality of life for the country’s poor since a popular uprising toppled the government of President Hosni Mubarak in February.
In recent days, drivers have been forced to form long queues in front of the country’s petrol stations as fuel supplies fall short of demand.
MENA quoted the prime minister’s spokesman Ahmed Al-Samman as saying the new budget would include LE 60 billion ($10.1 billion) for diesel and gas subsidies for the 2011/12 financial year that begins on July 1, up from LE 40 billion this year.
Of this, LE 45 billion would be allocated to diesel and LE 15 billion to gas.
Al-Samman was speaking after a cabinet meeting that reviewed the broad outlines of the new budget, which he said would "assure a market economy within a framework of social justice".
Finance Minister Samir Radwan said earlier this month he expected Egypt’s budget deficit to widen to 9.4 percent of gross domestic product (GDP) in 2011/12 from an expected 8.5 percent this year.
The International Monetary Fund said last month that Egypt had indicated it needed $10 billion to $12 billion to meet a funding gap.
