The Egyptian citizen pays 85% of the actual fuel price in the current fiscal year (FY) of 2017/18, while the government will lift the fuel subsidies completely in FY 2018/19, according to member of parliament (MP) Talaat Khalil, a member of the Plan and Budget Committee in the House of Representatives.
Khalil told Daily News Egypt that the government’s decision to lift fuel subsidies and leave citizens to face the risks of oil price fluctuations globally is a “disaster” in light of the low income of Egyptians, which does not exceed $3,000 annually.
He pointed out that a litre of gasoline costs 36 piasters in Egypt, where there is an average income of $3,340 per year, while its price reaches $1.84 in Norway, where there is an average income of $94,000 annually.
According to the government’s financial statement to the House of Representatives in FY 2016/17, there was a special programme of gasoline smart cards worth EGP 500m to protect the poor from fuel price hikes, but the government abandoned the programme due to the International Monetary Fund’s (IMF) pressure, said Khalil.
He added that the fuel subsidies decreased to EGP 61.7bn in FY 2016/17, compared to EGP 93.9bn in the previous year, stressing that the petroleum subsidies decreased in an unprecedented manner.
Khalil deprecated the government’s tendency to leave the Egyptian citizen exposed to the fluctuations of world oil prices under the pretext of applying economic reform without increasing the people’s incomes, contrary to the government’s programme presented to the House of Representatives.
“I have presented an inquiry against the government of PM Sherif Ismail on 3 July, with the aim to dismiss it and apply a real economic reform away from randomisation and confusion,” he said.
He noted that the government could not manage the pound flotation efficiently. The Central Bank of Egypt (CBE) decided to liberate the local currency in November, which increased the dollar price to EGP 20 per dollar at some point, leading to a wave of inflation up to 30%. Khalil said that the government expanded in internal and external borrowing in 2015/16, whereas the public debt reached EGP 2.99tn, compared to EGP 2tn in the previous year.
