Al-Monitor said that the Egyptians can be reassured during the next month and a half that they are safe from major shocks related to gas prices, as the Egyptian Ministry of Petroleum and Mineral Resources issued an official statement earlier this month, announcing that fuel prices will maintain their current levels Until next March.
The website quoted the General Manager of the East Gas Company, Muhammad Shuaib, that the decision was taken on January 2, during the third meeting of the committee to follow up the automatic pricing mechanism for petroleum products, as requested by the International Monetary Fund in exchange for assistance.
As for the second meeting of the committee, which was held on October 3 of last year, members of the committee reduced the price of one liter of three types of gasoline by 0.25 Egyptian pounds (the dollar is about 16 pounds), among other petroleum products, such as fuel oil and diesel .
The site indicated that, according to the decision taken in October, fuel prices decreased to 6.50 pounds per liter of the type "80 octane" and 7.75 pounds per liter of "92 octane" and 8.75 pounds per liter of "95 octane".
In addition, the committee reduced the price of fuel oil intended for industrial use by 250 pounds, to 4,250 pounds per ton.
A member of the Pricing Mechanism Follow-up Committee, Muhammad Shoaib, said that the committee's role was to determine fuel prices every three months, by linking the price of fuel "95 octane" in the local market to the global price of Brent crude, and converting it to the equivalent of a pound in exchange for the dollar equivalent.
In July 2019, the committee was entrusted with the responsibility of controlling and fixing the prices of all fuels, not just "95 octane", with a cap that was estimated within 10% of the increase and decrease.
In response to the IMF
According to the "Al-Monitor" report, the economic researcher at the Al-Ahram Center for Political and Strategic Studies, Mohamed Negm, believes that the automatic pricing mechanism is not exclusive to Egypt, as he stressed that the committee was expected to raise prices after Aramco's oil facilities in Saudi Arabia were attacked by a drone in Last September 16, but eventually decided to do the opposite, given the exchange rate down against the dollar.
For his part, the economist, director of the Nile Center for Economic and Strategic Studies, Abdel-Khaleq Farouk, explained that the automatic pricing mechanism for petroleum products was applied in response to the conditions of the International Monetary Fund, because Egypt obtained the fifth and sixth installments of the loan, which amounted to 12 billion dollars.
Farouk pointed out that floating the pound's exchange rate and lifting subsidies on fuel according to the IMF loan program, have seriously affected Egyptians, which has led to higher transport prices and thus reduced purchasing power.
The economist pointed out that the government was expected to reduce the prices of petroleum products after the exchange rate fell from 18 pounds to less than 16 pounds compared to the dollar.
He pointed out that transportation prices did not decrease despite the drop in fuel prices in October, as it proved that the decline was modest, according to the same report.