Economists welcome fuel price hikes as scuffles erupt across Egypt

Amid fears of the consequences of the steepest comprehensive fuel price hikes in decades, a number of economists and analysts have welcomed both the timing and the magnitude of reforms to Egypt’s bloated fuel subsidy program.

On Friday at midnight, the government of Egypt raised the prices of three widely-used state-subsidized fuels, 80 octane gasoline, 92 octane, and diesel fuel, by up to 78 percent.

The move is part of a larger effort to rein in Egypt’s budget deficit to 10 percent of GDP in the 2014/2015 fiscal year by cutting LE44 billion in spending on energy subsidies, among other measures.

Egyptians woke up to find the prices of certain modes of non-governmental public transport, such as the popular microbus, were charging 50 percent-higher fares than the previous day.

“This morning I paid LE1.5 to take the microbus from Bulaq El-Dakroor to Is’af,” Ahmed Mohamed, complained Ahmed Mohamed, a young waiter in an upscale Cairo neighbourhood.

In the Nile delta governorate of Sharqiya, scuffles broke out between the drivers who increased their rates and groups of commuters, according to state-run Al-Ahram’s Arabic website.

The Transport Workers Union announced a state of emergency after what they described as mounting complaints from workers and strikes by drivers.