CAIRO (AP) — Egypt’s government announced a decrease in fuel prices Thursday for the first time in decades, a cut that comes after a series of hikes in recent years amid an ambitious program aimed at overhauling the country’s ailing economy.
The Petroleum Ministry said in a statement that the new prices would go into effect Friday, and would be reviewed after three months, partly based on international oil prices.
The price for 92-octane gasoline is being lowered to 7.75 Egyptian pounds a liter from 8 pounds, while the cost of 80-octane gas drops to 6.50 Egyptian from 6.75 pounds, the statement said.
The announcement came after rare anti-government protests believed to have been partly driven by economic hardship, though analysts discounted the idea that President Abdel-Fattah el-Sissi’s government was bowing to the unrest.
“The change actually just reflects (the) fact that (the) price of oil has dropped since they were set in July and it was already policy to adjust the prices to track market,” tweeted Timothy Khaldas, a non-resident fellow at the Tahrir Institute for Middle East Policy.
Egypt hasn't seen market-based fuel prices in generations, but the government moved earlier this year to adjunct fuel prices to track the world market, Khaldas noted.
The government had increased fuel and cooking gas prices by up to 22% in July.
In 2016, Egypt agreed to slash a range of energy subsidies and economic changes in exchange for a $12 billion loan from the International Monetary Fund. The changes included floating Egypt’s currency, making substantial cuts in state subsidies on basic goods, and introducing a wide range of new taxes.
The tough austerity measures have won praise from economists and business leaders but have been a heavy blow to poor and middle-class Egyptians. The official statistics agency reported in July that one in three Egyptians is poor.
Earlier this week, el-Sissi said he would do more to protect poor and middle-class Egyptians, in his first remarks on the economy following the protests.
On Tuesday, the supply ministry said it had put 1.8 million people back in its food staples subsidy program, which provides goods to more than 60 million of Egypt’s nearly 100 million people.
El-Sissi has made the economy the focus of his rule, with a hands-on drive for fiscal reform, improved infrastructure and construction of new cities. He has urged Egyptians to be patient during the effort to overhaul and economy that is still recovering from unrest following the 2011 uprising that toppled longtime ruler Hosni Mubarak.