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Egyptian government will end fuel subsidies by June 2019

As part of a reform programme led by the International Monetary Fund (IMF), the Egyptian government has decided to end subsidies on most fuels by mid-June 2019 . The country is committed to reaching full cost recovery by the end of 2018-2019 for all fuel products, except for liquefied petroleum gas (LPG) and fuel oil used in bakeries and for power generation, which will not be affected. The authorities have decided to opt for a phased approach to the planned introduction of fuel price indexation for all fuel products. Besides, the government is also considering hedging oil prices. The reform of electricity subsidies will continue as planned towards the objective of full elimination by 2020-2021.

A new US$2bn loan payment has been approved and will be allocated as Egypt committed to reducing energy subsidies under the framework of the 3-year US$12bn IMF loan programme in 2016. This last payment brings the total amount currently allocated to Egypt to approximately US$10bn since the loan was signed in November 2016.


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