Ahmed Kamel – Egypt Daily News
The Egyptian government expects to save approximately EGP 28 billion (roughly $588 million) in the 2025–2026 fiscal year following the latest increase in fuel prices, according to a senior government official speaking on condition of anonymity.
This marks the second fuel price hike Egypt has implemented in 2025, with new prices coming into effect as of Friday morning. The increases, which apply to all fuel types, amount to approximately 11.6%.
Details of the Price Adjustment
The new prices are as follows:
- Octane 80 gasoline: EGP 17.75 (up from EGP 15.75)
- Octane 92 gasoline: EGP 19.25 (up from EGP 17.25)
- Octane 95 gasoline: EGP 21.00 (up from EGP 19.00)
- Diesel (sulfur-free): EGP 17.50 (up from EGP 15.50)
Despite the increases, the government has chosen to maintain subsidies on diesel through the end of 2026 in an effort to minimize inflationary pressure and protect low- and middle-income Egyptians, especially those dependent on public and cargo transportation.
Redirecting Subsidies Toward Social Protection
The official emphasized that the budgetary savings from the reduced fuel subsidies will be redirected toward expanding social protection programs, such as the flagship “Takaful and Karama” (Solidarity and Dignity) initiative. The program, which provides financial assistance to low-income families, is expected to reach more households across Egyptian governorates in the coming year.
Fuel Subsidy Trends and Fiscal Strategy
Had the government chosen not to increase fuel prices, the total fuel subsidy bill could have ballooned to over EGP 200 billion by the end of the current fiscal year, compared to the EGP 154 billion allocated in the 2024–2025 budget. However, under the new pricing scheme, the government plans to cut this figure dramatically to EGP 75 billion in the next fiscal cycle.
This move is part of a broader fiscal tightening strategy, as Egypt continues to implement economic reforms in cooperation with international financial institutions like the International Monetary Fund (IMF).
Rising Consumption Pressures the Budget
Fuel consumption in Egypt has surged significantly. According to a separate government official, gasoline consumption rose by 10% year-on-year in the third quarter of 2025, reaching 25,000 tons per day, up from 23,000 tons during the same period in 2024. This sharp rise far exceeds the typical annual growth rate of 2% and has placed additional pressure on the state’s fuel subsidy budget.
“The increase in consumption has reversed some of the subsidy savings achieved through recent price hikes. Even with higher prices, rising demand has pushed subsidy costs upward again,” the official explained.
Ongoing Fuel Imports Strain the Budget
Despite a global decline in oil prices and shipping costs, Egypt’s dependence on fuel imports remains a major strain on its finances. The country imports:
- 40% of its diesel needs
- 50% of its liquefied petroleum gas (LPG)
- 25% of its gasoline supply
These imports cost the Egyptian government an estimated EGP 366 million per day, or approximately EGP 11 billion per month, in subsidies, according to previous official estimates.
The official added that the Egyptian General Petroleum Corporation (EGPC) must now meet the rising domestic demand to prevent supply shortages, especially in the automotive sector.
While the latest fuel price increases are aimed at reducing the state’s financial burden, they come amid rising consumption and ongoing economic challenges.
