In a move aimed at reducing its budget deficit and curbing subsidies, Egypt has raised the prices of various petroleum products, marking the second increase this year. This latest adjustment, reported by the country’s official newspaper, is part of broader efforts to align domestic energy costs with global market prices and reduce government spending.
The price increases, which range between 10.5% and 12.9%, follow a nearly 15% surge in April. The Egyptian Ministry of Petroleum confirmed that the government plans to freeze domestic fuel prices for at least one year after this adjustment. The freeze comes amidst various regional, local, and international developments that are impacting the global oil market.
Among the most commonly used fuels in Egypt, diesel has seen a notable price hike. The cost of diesel has risen by 2 Egyptian pounds per liter, bringing the new price to 17.50 pounds, up from 15.50 pounds. This adjustment underscores the government’s continued focus on reducing energy subsidies and ensuring that domestic prices reflect actual production and market costs.
Despite the price increases, the Ministry of Petroleum emphasized that the government will freeze fuel prices for the next year in an effort to stabilize domestic energy costs. The ministry also assured that Egypt’s oil sector will continue to operate at full capacity, focus on settling debts with foreign partners, and prioritize efforts to reduce fuel import costs. Additionally, the government is working to encourage increased production, which will help alleviate the strain caused by rising global energy prices.
As part of ongoing fiscal reforms, Egypt remains committed to eliminating energy subsidies, with a goal to align domestic fuel prices with global market rates by December. The government has confirmed it will maintain diesel subsidies, even if it requires raising other fuel prices to offset the cost. This approach is seen as necessary to address Egypt’s significant current account deficit, which the International Monetary Fund (IMF) highlighted in March.
In exchange for an $8 billion loan agreement with the IMF, Egypt has been urged to reduce subsidies on fuel, electricity, and food while expanding social safety nets for vulnerable populations. The IMF has emphasized the importance of these structural reforms to ensure long-term economic stability, especially in light of Egypt’s ongoing current account deficit challenges.
Current Account Deficit and Fuel Imports
In the second quarter of 2025, Egypt’s current account deficit stood at $2.2 billion, with petroleum product imports rising to $500 million—an increase from the previous year’s $400 million. These figures highlight the growing pressure on Egypt’s foreign currency reserves, making the push to cut subsidies and reduce dependence on imported energy sources more critical than ever.
Gasoline prices have also seen significant increases, with up to a 12.7% rise in some grades. The price of 80-octane gasoline now stands at 17.75 pounds per liter, while 92-octane is priced at 19.25 pounds, and 95-octane at 21 pounds per liter. These increases reflect the broader global trends of rising fuel prices, which have been exacerbated by geopolitical tensions and market volatility.
As Egypt navigates these economic challenges, the government’s strategy to gradually phase out subsidies while balancing fiscal responsibility and social protection will be critical to its efforts in stabilizing the economy and securing future financial support from international institutions like the IMF.
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