22 November 2016

Egypt: Cairo Governor Raises Taxi Fares Following Increase in Fuel Prices

Cairo — The Cairo Governor announced on Tuesday that taxi fares' initial charge will increase from EGP 3 to EGP 4, along with an increase in the rate per kilometer from EGP 1.4 to EGP 1.75, in the wake of a surge in the prices of fuel.

Taxi drivers called on the cabinet earlier this month to adjust the fare in accordance with the recent hikes in energy and fuel prices.

The government raised fuel prices by up to 47 percent on November 4, hours after the Central Bank decided to float the currency. Both measures were seen as part of an economic reform package that aims to reduce the budget deficit and the public debt.

According to the Petroleum Ministry, the prices for 80 octane gasoline increased to reach EGP 2.35 per litre instead of EGP 1.6, and 92 octane gasoline increased to EGP 3.5 instead of 2.6 per litre, while diesel increased to EGP 2.35 per litre from EGP 1.8 - an increase of 30.5 percent. The government kept 95 octane stable at EGP 6.25 per litre, with no subsidies.

Meanwhile, natural gas increased to EGP 1.6 per cubic metre instead of only EGP 1.1.

The Cairo Governor announced the newly adjusted taxi fare to be effective as of Tuesday after Prime Minister Sherif Ismail approved the Cairo governorate's proposal to adjust the fare.

Cutting fuel subsidies came as part of the government's efforts to cut spending and meet conditions for a loan from the International Monetary Fund (IMF).

Egypt secured a three-year $12 billion loan from the IMF meant to support the country's economic reform programme days after the central bank announced the flotation of the Egyptian pound and the government decided to raise energy prices .

The government also adopted a few reform measures including the introduction of the value added tax, and raising electricity prices.

The Central Bank confirmed the receipt of the first tranche of the loan worth $2.75 billion. The second tranche is expected in the spring, according to IMF Mission Chief in Egypt Chris Jarvis.

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