Egypt: Rise in fuel prices likely to increase popular discontent

Event

On Thursday, June 29, the government announced a 55 percent increase in fuel prices. According to officials, 82 octane gasoline and diesel will increase from USD 0.31 per liter (2.35 Egyptian pounds) to USD 0.2 per liter (3.65 Egyptian pounds ), while 92 octane gasoline will increase from USD 0.19 per liter (3.5 Egyptian pounds) to USD 0.27 (5 Egyptian pounds). These price rises will likely increase the already existing popular discontent over the government’s recent austerity measures. Protests in the coming days are possible.

Prime Minister Sherif Ismail stated that the price increases are due to a cut in fuel subsidies to allocate funds to more important subsidies for low-income individuals.  

Context

President Abdel Fattah el-Sisi began implementing austerity measures under the conditions of a USD 12 billion loan from the International Monetary Fund (IMF) in November 2016. The IMF loan also required Egypt to move from a pegged exchange rate to a floating exchange rate, causing a significant devaluation of the Egyptian pound and contributing to inflation levels reaching around 30 percent. The increase in fuel prices is expected to further increase inflation.

This is the second-time fuel prices have been increased since November 2016, with the government previously increasing prices in 2014.

Tensions have been high in Egypt since the Egyptian Parliament’s approval of a treaty on June 15 that transferred control of the Red Sea islands of Tiran and Sanafir to Saudi Arabia, which resulted in clashes between protesters and police. As many as 40 political opponents were arrested nationwide during raids by Egyptian police after political leaders and activists called for protests in Cairo’s Tahrir Square following midday prayers on June 16. On Saturday, June 24, Egyptian President Abdel Fattah Al-Sisi ratified the treaty.

Advice

Individuals in Egypt are advised to monitor developments to the situation and avoid any protests or other public gatherings.

More generally, individuals in Egypt should report any suspicious objects or behavior to the authorities and always be on guard when visiting sites deemed particularly vulnerable to an attack (public transportation, train stations, ports, airports, public or government buildings, embassies or consulates, international organizations, schools and universities, religious sites, markets, hotels and restaurants frequented by foreigners/Westerners, festivals, etc.). The security environment in Egypt remains complex. Although travel is permissible in some areas, other areas should be considered strictly off limits. Professional security advice and support should be sought prior to travel.