The government is now bearing the difference in cost, as it has become a supported commodity after being sold at a cost equal to its supply cost.
Ministry of Petroleum increases local diesel prices due to global oil prices and exchange rates - Press Photo
Ministry of Petroleum and Mineral Resources announced an increase in the local diesel price due to the global rise in petroleum prices and the exchange rate of the Egyptian pound against the US dollar between July 2022 and April 2023, resulting from the repercussions of the Russian-Ukrainian crisis.
The ministry clarified that this led to an increase in the cost of providing one liter of diesel to the state, reaching EGP 12.25, while it is sold locally to consumers at a price of EGP 8.25 per liter starting from today.
The government is now bearing the difference in cost, as it has become a supported commodity after being sold at a cost equal to its supply cost.
The ministry added that the support directed to diesel only amounted to EGP 222 million per day before the decision to increase, equivalent to EGP 7.6 billion per month, or a total of EGP 80 billion as an annual average for diesel production only.
It explained that after the application of the increase decision of one pound per liter, diesel still costs the state EGP 178 million per day instead of EGP 222 million, equivalent to EGP 3.5 billion per month, or a total of EGP 64 billion annually.
The ministry pointed out that the diesel price remained unchanged for the consumer from July 2019 to July 2022, for a period of three years, at a price of EGP 6.75 per liter, and then the price was increased by 50 piasters in last July to be sold at a price of EGP 7.25 per liter during the period from July 2022 to April 2023.
It is worth mentioning that since 2016, the Egyptian economic reform program had among its main objectives the reform of energy support and the correction of its prices through a gradual time-bound program. This program has achieved the break-even point in June 2019, where the selling price is equal to the cost for diesel, gasoline, and industrial diesel, taking into account price distortions between products.
