Egypt Raises Fuel Prices Amid Middle East Energy Disruptions and Rising Global Costs

Egypt raised fuel prices by 14% to 17% on Tuesday, citing rising global oil and gas costs and disruptions in Middle East energy supply due to the US-Israeli conflict with Iran. Diesel increased to 20.50 Egyptian pounds per litre, while gasoline rose depending on the grade. This is the first hike of the year, following previous increases in October. The government continues to work with the IMF, which has encouraged subsidy cuts and social safety measures amid ongoing economic pressures.

Egypt increased prices on a wide range of fuel products on Tuesday, the country’s petroleum ministry announced, citing the continued impact of rising global oil and gas prices and the disruption of energy production in the Middle East caused by the ongoing US-Israeli conflict with Iran. The ministry described the decision as necessary given “the exceptional situation resulting from the geopolitical developments in the Middle East region and their direct effects on global energy markets.”
The move comes shortly after Egyptian Prime Minister Mostafa Madbouly, during a press conference on March 3, warned that the government might need to implement “exceptional measures” if global fuel prices rose sharply as a result of the war. Analysts have noted that energy markets have been significantly affected, with Tehran targeting ships and energy infrastructure, effectively halting some navigation in the Gulf and forcing production stoppages in key oil-producing countries, including Qatar and Iraq.
The increases announced on Tuesday range from approximately 14% to 17% across a variety of petroleum products, marking the first such hike of the year. This follows a previous adjustment in October, when fuel prices were raised by nearly 10.5% to 12.9%. At that time, the government had announced a plan to freeze domestic fuel prices for at least a year, citing a combination of local, regional, and global developments that required careful monitoring.
Diesel, which is among the most widely used fuels in Egypt for transportation and industry, was increased by 3 Egyptian pounds per litre, bringing the new price to 20.50 pounds ($0.3887) from the previous 17.50 pounds. Gasoline prices were also raised, with increases varying according to the grade: 80 octane gasoline rose to 20.75 pounds per litre, 92 octane reached 22.25 pounds, and 95 octane climbed to 24 pounds per litre. These adjustments reflect both the rising cost of imported crude oil and the broader regional instability affecting supply chains.
Since 2016, Egypt has relied on consecutive financing arrangements with the International Monetary Fund (IMF), beginning with a $12 billion loan programme aimed at stabilizing the country’s economy. Over the years, the IMF has urged the Egyptian government to reduce subsidies on fuel, electricity, and food, while simultaneously expanding social safety nets to protect vulnerable populations from economic shocks. In March 2024, Egypt agreed to an expanded $8 billion loan programme with the IMF, further reinforcing the government’s need to manage fiscal pressures amid rising global energy costs and ongoing geopolitical uncertainties.
Economic analysts have warned that the recent fuel price hikes could have a ripple effect on the Egyptian economy, potentially increasing transportation and production costs for businesses and impacting household expenses. Government officials have emphasized that such measures, while difficult, are necessary to maintain macroeconomic stability and ensure continued access to essential energy supplies for the population.
The government has also indicated that it will continue monitoring regional developments closely and may take further measures if global energy markets remain volatile due to the conflict in the Middle East. Public reaction to the price hikes has been mixed, with some citizens expressing concern over rising living costs, while others acknowledge the broader geopolitical pressures that have necessitated such decisions.