CAIRO - The Egyptian government's decision – just before two in the morning on Thursday – to raise the price of diesel shocked various economic sectors, led by transport and agriculture, threatening an additional wave of prices coinciding with the implementation of "harsh reform" conditions imposed by the International Monetary Fund, in preparation for the disbursement of the second installment of the loan, which sparked increasing controversy.

The government announced that the decision came "in light of the increase in international prices of crude oil and petroleum products and the exchange rate of the pound against the dollar," and the government committee decided to increase the price of diesel by one pound per liter, bringing the selling price in the local market to 8.25 pounds per liter (the dollar equals approximately 31 pounds).

The committee also decided to fix the prices of gasoline of all kinds at 8.75 pounds per liter of gasoline 80, 10.25 pounds per liter of gasoline 92, and 11.50 pounds per liter of gasoline 95, as well as fixing the sale price of a ton of diesel for non-electricity and food industry uses at 6 thousand pounds per ton.

The economist at the Center for Middle East Studies Ali Al-Jabali describes the increase as shocking, and explains to Al Jazeera Net that the price of diesel increased by 13.8%, and this means automatically - as he says - increasing the tariff of public transportation, and the high cost of producing agricultural crops, and perhaps increasing electricity bills at a later time.

Jebali pointed out that diesel is the main fuel for many public transport, power plants, agricultural production tools, passenger transport, various products, bakeries and industries.

And links Professor of Economics at Beni Suef University Naim Lamie decision approaching Egypt to obtain the second tranche of the IMF loan, which amounted to $ 347 million, and expects in his speech to the island net to be the next step to raise the interest rate in banks with a new reduction in the value of the pound, as for the privatization of public companies are going at accelerated steps, as he put it.

The confusion appeared early on the pharmaceutical sector, as the head of the General Syndicate of Egyptian Pharmacists, Mohieddin Obeid, tweeted angrily and considered that any movement of fuel prices at this time is a wrong decision, describing the government as "confirming that it is separate from the reality experienced by Egyptians and the state of boiling due to the flames of prices."

Says economic researcher Mohamed Zaki for Al Jazeera Net that raising the price of diesel tightens the noose on the necks of Egyptians, because it is linked to all sectors and arteries of the economy and the movement of life, and Zaki does not see the need to respond to the conditions of the International Monetary Fund, considering that the value of the second tranche of the loan is not worth opening the door to a wave of high prices.

In the same context, analyst at the Center for Middle East Studies Alaa Abdel Sayed expected a further rise in inflation rates, which recently reached a record rate approaching 33%, according to official estimates, but stresses that the high prices associated with the increase in the price of diesel threaten to hinder any growth in the sectors of production, industry and agriculture, pointing out that these sectors depend mainly on diesel.

Egypt consumes 13 million tons of diesel annually and about 7 million tons of gasoline (Al Jazeera)

Raising the ride tariff

Immediately, government public transport vehicles announced a 10% increase in the ride tariff, while local administration agencies in various governorates decided to raise the maximum level of preparedness and activate the operating rooms to monitor the regularity of parking lots and fully comply with the application of the new tariff, which they said will not exceed 10%.

It also announced action to monitor the progress of gas stations after news that some of them had stopped in Beheira governorate.

In the early hours of Thursday morning, hours after the decision was implemented, a state of confusion overshadowed movement at mass transit stops in the El Hosary area of 6th of October City, as well as along the road towards Ramses Square (downtown Cairo), due to a government decision to consider Thursday an official holiday, instead of the Labor Day holiday that was canceled last Sunday.

Jamalat Hussein – employee in the government sector – catch her breath after a useless argument with the driver of the microbus on the tariff ride, and told Al Jazeera Net that "the time is not appropriate to approve any increase in prices," and warned of a new wave of rise in the rest of the goods and services.

Marwa al-Sayed, a housewife, predicted imminent rises in the prices of electricity, water and household gas, and indicated that her first battle will begin over school bus fees, which are expected to be raised.

Gamal Abdel Dayem, an employee at a tourism company, justified the government's resort to moving fuel prices, and pointed to global rises in prices and not only in Egypt, but at the same time he believes that the government should not be fully subject to all the requests of the International Monetary Fund, as people's lives are getting more difficult, as he put it.

Abu Islam, an employee at the Ministry of Health, complains that the disaster will come only on the head of the citizen, and explains that drivers double the fare of riding in their own way, and divide the "route" into several stages, so the passenger pays more than once for the same trip.

On a different level, pages titled "I paid how much in your area" spread on social media to collect information about the price of the ride fare in each area, amid a state of controversy, anger and lack of clarity.

Salameh Mustafa, a truck driver, speaks of a "muffled boil" between drivers and owners of cars transporting construction materials and food products, which he says are threatened with stopping, and denies any move to strike because of what he said were security pressures.

Confusion in bakeries

The confusion did not stop at the transport limits, but spread to bakeries amid fears of negative repercussions on a loaf of bread, which has recently been exposed to multiple price fluctuations.

Ali Rabie, a bakery owner in Sheikh Zayed, Giza governorate, says he has recently switched to natural gas instead of diesel and that the recent increase will not affect a loaf of bread, but he noted that bakeries that run on diesel will undoubtedly be affected.

The Ministry of Supply said it is paying the net cost of manufacturing a loaf of bread produced in municipal bakeries that run on diesel fuel, according to what is proven from bread sales on the system under the smart ration card.

The Minister of Supply Ali Al-Moselhy – in statements published by local newspapers – that the citizen gets subsidized municipal bread through the supply card at a price of only 5 piasters, and stressed the state's continued bearing the difference in the cost of production and payment to bakery owners through the Supply Commodities Authority.

He comments on that pharmacist Yasser Tayeb saying that he does not find any echo of government support, and says to the island net "The decision hasty and ignorant of the interest of the citizen, almost two months ago increased the price of gasoline one pound, did not increase the price of solar, and the media remained enumerating and praising the wisdom of the decision not to increase the price of diesel, what will he say now. "

Khaled Jamal, a newly graduated doctor, believes that the government has no solution but the pocket of the citizen, and indicates that the matter will push for a new increase in the prices of medical supplies and treatment.

Fears that the decision to raise the price of diesel will cause a crisis for bakeries (Al Jazeera)

IMF hammer

The decision to raise the price of fuel comes in application of a pricing mechanism stipulated by the International Monetary Fund, which agreed, on December 16, to provide a loan to the Egyptian government worth $ 3 billion, according to a financial reform program that extends to about 4 years, and is expected - according to the program - to obtain loans worth $ 14 billion through international and regional partners.

While the Egyptian market awaits the disbursement of the second tranche of the loan, the Egyptian government had to continue to move the price of fuel and prepare for an additional floating of its currency, as the IMF requires the government to exit economic projects, open more space for "privatization", and stop the subsidies implemented by the Central Bank of Egypt to support lending plans.

According to government figures, allocations for petroleum subsidies rose to EGP 66 billion during the first half of the fiscal year 2022-2023, due to the liberalization of the EGP exchange rate, in parallel with the rise in global oil prices.

Each time, the government repeats the same justifications and defends itself by talking about subsidizing petroleum products, this time saying that it has increased by 290%, compared to the same period last year, when it did not exceed 17 billion pounds.

The government confirms that it was aiming for the value of petroleum subsidies in the current fiscal year 2022-2023 not to exceed EGP 28 billion, while the fuel subsidy bill in the final account of the 2021-2022 budget amounted to EGP 59 billion, an increase of 212% from the fiscal year 2020-2021, which recorded EGP 18.9 billion.

Egypt consumes 13 mn tonnes of diesel and about 7 mn tonnes of gasoline annually, according to the latest data from the Central Agency for Public Mobilization and Statistics (CAPMAS).

International banks and financial institutions predict that Egypt is on the verge of a fourth floating of its currency, which threatens a new wave of high prices, lowers living standards and opens the door to social unrest.