Oil price hike could cause 200% increase in cost of other goods: CPA
YOUM7 (Archive)

CAIRO: A recently announced hike in the price of oil products following the removal of government subsidies could cause as much as a 200 percent increase in all products due to a certain increase in transportation costs and a possible increase in productions costs, Consumer Protection Agency (CPA) head Zeinab Awad Allah told Al-Masry Al-Youm Saturday.

“Fuel and electricity price increases will not only negatively impact all products, but also increase the cost burden on citizens,” she said. “The government is making random decisions in a far cry from economic reform, as it will increase the cost of everything.”

Awad Allah also warned the cost increase could start monopolies and would cause public anger and backlash.

Echoing Awad Allah’s concerns, Ahmed Yahiya, head of the Food Commodities Division at the Cairo Chamber of Commerce, told The Cairo Post Saturday that the increase in oil prices will negatively affect the price of goods and affect production rates.

“Egypt does not have commodity exchanges for pricing goods and services,” he said, adding that the lack of commodity exchanges could lead to monopoly and that the government needs to come up with countermeasures to address the inevitable rise in the price of goods and production declines.

The government’s announcement that it would begin removing fuel subsidies on Thursday was driven by a need to reduce expenditures and lessen the budget deficit according to Prime Minister Ibrahim Mahlab in comments the state-run MENA ran Saturday. Mahlab said the government had discussed the decision and its consequences thoroughly, and is working to find solutions.

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