The Egypt government hiked domestic prices for fuel products on February 11 with an increase of up to 15 percent, according to local media sources. The measure has been adopted in frame of the government’s target to reduce fuel subsidies according to the requirements of the International Monetary Fund’s (IMF) $8 billion support package.
In particular, the increases were announced from 11.76 percent to 14.8 percent depending on the fuel product. The prices for fuel supplied to industries, including steel, have increased to EGP 10,500/mt, while diesel and kerosene are now both available at EGP 15.5 per litre. The price of 95-octane gasoline is now at EGP 19 per liter, while 92-octane and 80-octane grades are priced at EGP 17.25 and EGP 15.75 per liter, the official sources state. In the meantime, diesel prices for power generation remain unchanged.
The measure is expected to have only a limited effect on the steel industry while the impact on the general situation in the country may be more serious. Overall, logistic costs, including those for steel and raw materials, are expected to rise, but the price of goods in Egypt will also increase following higher transportation costs. “For the steel industry, the main energy sources are electricity and natural gas, those haven’t increased yet… If the products are being produced using these kinds of fuel, the prices will increase further. Inflation is expected to go higher,” a local source told SteelOrbis.
