The fuel price increase has pushed the cost of services in Egypt’s tourist restaurants up by approximately 30% said Hisham Mahmoud, member of Egypt’s Chamber of Tourist Restaurants. He added that consumers will bear the burden of the price difference in the end.
The price increase will affect turnout in restaurants for the coming months, negatively impacting restaurant and café, according to Mahmoud.
The prime minister raised fuel prices by between 7-120% for some types of fuels.
The tourism sector consumes a large percentage of diesel, 22% of 12.5m tonnes, according to a study completed by the Federation of Egyptian Industries.
There are approximately 1,200 tourisst restaurants registered with the Chamber out of a total 7,000 in Egypt according to Wagdy Kerdany, former chairman of the chamber.
Kerdany said: “Introducing unregistered restaurants under the Chamber’s jurisdiction will help balance competition and increase tax revenues for the state.”
Kerdany added thatthe price increase would negatively impact turnout rates, especially in Cairo, which has suffered low tourist occupancies for the past three years.
Hisham Mahmoud criticised the fuel price increase for the tourism sector in light of the current situation.
“The government has several alternatives for increasing tax revenues and introducing the informal sector into the tax system,” Mahmoud said. He expects a decrease in revenues by approximately 20% as a result of the price increase.
The Chairman of the Chamber of Tourist Restaurants, Aly Kamal Mansour, called on restaurant owners to avoid increasing prices by more than 10%. He encouraged this especially as the decision in increase fuel prices comes in light of an accumulating budget deficit.
Despite this, several restaurants increased prices by approximately 50%.
The price of Iftar and Suhoor meals during Ramadan increased by 10% to reach EGP 100 per individual for Iftar and EGP30 for Suhoor, according to Mansour.
He added that the price for 100 cubic metres of diesel fuel increased from EGP 750 to EGP 1150 in light of fuel price increases.
The tourism sector previously obtained a litre of diesel for EGP 1.10 but this rate has risen to EGP 1.80 according to the Prime Minister.
Mansour added that the price of one canister of butane gas increased from EGP30 to EGP60. He also said “these increases will push prices up dramatically, but we should not increase prices more than 10% in light of the difficult circumstances that Egypt currently confronts.”