What will happen regarding the prices of gasoline, diesel, gas and butane in the coming days, and what is the big surprise that the Petroleum Pricing Committee has prepared for the citizens? Come and see what the story is in this video. Stay with us until the end.
All of Egypt is waiting for the decision of the Petroleum Pricing Committee, which meets every 3 months to review prices and announce them to citizens. Although Egyptians are very busy with the power outage crisis these days as part of the load shedding policy due to the unprecedented high temperatures and the high school exams, people are still focused on the news of the Gasoline and Diesel Pricing Committee because it has been said a lot that there is a trend to raise the prices of petroleum products, and this will have negative effects on the prices of most goods and services because the citizen is the one who bears the burden of increasing the cost of producing goods and transportation in the end.
Ok, what are the scenarios for the decision of the Petroleum Pricing Committee in the coming hours or days?
Look, sir, a few days before any meeting of the Pricing Committee, the Egyptian General Petroleum Corporation presents a detailed report to the committee that includes the global Brent crude price curve during the second quarter of the current year to determine the most applicable scenario regarding the tariff for selling fuel in Egypt during the first quarter of the fiscal year 2024-2025.
According to the information, the Fuel Pricing Committee is currently studying a number of proposals and scenarios that were prepared by representatives of the Egyptian Ministry of Petroleum and some concerned parties during the current June. The first scenario is to raise the prices of gasoline and butane cylinders, and to stabilize the prices of diesel to protect the middle- and low-income groups and to prevent the prices of other consumer sectors and transportation and shipping tariffs in Egypt from being raised. That is, the committee is studying increasing the prices of gasoline and butane and stabilizing diesel so that the means of transportation do not know the pricing and to support farmers who use diesel for irrigation.
The team that leaned towards this scenario believes that the government must bear additional support in the new fiscal year at a rate of 22.7% over the current fiscal year, and this means that part of the financial allocations to provide fuel in the market will be borne by the state’s consumer sectors, whether citizens or commercial and industrial consumers, so that the committee can fix the price of diesel.
The sources said that the reports that will be presented to the pricing committee in the meeting to determine fuel prices will include a presentation of the current actual cost of petroleum products in Egypt, which has increased recently as a result of internal and external variables affecting the price of fuel, whether due to movements in the dollar exchange rate against the pound or the cost of transportation and shipping from abroad, and these factors will certainly affect the price of fuel, which the government is still subsidizing.
As for the second scenario, which is also strongly proposed, which is to delay the decision of the Petroleum Products Pricing Committee until after next July, and work will continue at the current prices. This is due to the coincidence of the meeting of the Fuel Committee with economic crises and power outages, in contrast to the Egyptian government’s tendency to increase electricity prices starting in July, and therefore the government is possible. It resorts to the scenario of delaying the movement of fuel tariffs, taking into account the social dimension of citizens.
The third scenario is unlikely due to the difficulty of implementing it, but everything is possible, which is that the Fuel Pricing Committee resorts to reducing the prices of gasoline, diesel, and gas, or reducing any type of them and stabilizing the rest. We say that this scenario is difficult because it will burden the state with large sums of money, at a time when it imports 25% of its fuel needs through imports from abroad and in dollars, of course.
We remind you that the Ministry of Petroleum takes into consideration the global markets and the exchange rate, which is largely linked to Brent crude prices. The Petroleum Authority’s report revealed that global oil prices are trading at a level close to $85 per barrel, meaning a difference of $3 higher than the estimated price per barrel in the budget for the next fiscal year, which makes the scenario of increasing fuel prices more likely.