CAIRO: The oil price hike would save 51 billion EGP ($7.1 billion) for the state treasury, Prime Minister Ibrahim Mahlab said in the press conference at the Cabinet headquarters Saturday.
Mahalab’s government raised the fuel prices on Friday at midnight to 78 percent, he said and that Egypt spent 687 billion EGP (96.08 billion dollars) on subsidizing petroleum products during the past ten years.
“It is not reasonable to waste 134 billion EGP ($18.74 billion) on subsidized fuel products this year,” he said.
The aim of oil price hike is to raise awareness and create social justice, referring to the ingrained poverty and unemployment in Egypt.
The poverty percentage reached 26.3 percent, unemployment reached 13.6 percent, and that unemployment among the youths from 20- to 30-years-old reached 56.7 percent, he added.
“How will we achieve social justice, while we are subsidizing for the rich at the expense of the poor,” he added.
Minister of Transportation Hany Dahi said the government decision’s was the “greatest decision made in the successive governments in Egypt’s history” and that it is the beginning for correcting the national economic path, he said in a phone interview with 90 Minutes program on Mehwar TV Saturday.
In conflicting statements about the real amount of subsidizing fuel products, Dahi said the total amount of subsidized petroleum during the past five years reached 500 billion EGP (69.92 billion dollars), which conflicts with Mahlab who said in the press conference that the total reached 687 billion EGP in the past ten years.
He added said the tariff increase will not exceed 5 percent.
Was a burden
Minister of Petroleum Sherif Ismail said the Egyptian economy reached a stage where it cannot bear any more subsidies and that the petroleum subsidy was a burden on the state budget, Ismail said in a phone call with Al-Ashera Masaa program on DreamTV Saturday.
There is a five-year plan to lift and reduce subsidy so it does not affect the general state budget, he said and that this would help the government set up new projects and improve the state’s infrastructure.
During the past six years, the subsidy was increasing, the number of percentage of the poor was increasing, and the budget deficit was also increasing, he cautioned and that everyone has to deal with reducing subsidy seriously.