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Egypt Raises Domestic Fuel Prices by up to 15% before IMF Review

This picture taken on March 20, 2024 shows a view of the Cairo University bridge across the Nile river connecting Cairo (R) with its twin city of Giza (L). (AFP)
This picture taken on March 20, 2024 shows a view of the Cairo University bridge across the Nile river connecting Cairo (R) with its twin city of Giza (L). (AFP)
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Egypt Raises Domestic Fuel Prices by up to 15% before IMF Review

This picture taken on March 20, 2024 shows a view of the Cairo University bridge across the Nile river connecting Cairo (R) with its twin city of Giza (L). (AFP)
This picture taken on March 20, 2024 shows a view of the Cairo University bridge across the Nile river connecting Cairo (R) with its twin city of Giza (L). (AFP)

Egypt raised the prices of a wide range of fuel products on Thursday, the official gazette said, four days before the International Monetary Fund (IMF) conducts a third review of its expanded $8 billion loan program for the country.

The official gazette, citing the petroleum ministry, said petrol prices increased by up to 15% per litre, with 80 octane rising to 12.25 Egyptian pounds ($0.25), 92 octane to 13.75 pounds and 95 octane to 15 pounds.

Diesel, one of the most commonly used fuels, saw the biggest increase, rising to 11.50 Egyptian pounds ($0.24) from 10 pounds, according to Reuters.

This is the second time the government has raised fuel prices since the IMF expanded its loan program by $5 billion in March. Egypt has committed to slashing fuel subsidies as part of the agreement.

But Egyptians who spoke to Reuters, including taxi driver Sayed Abdo, complained that Thursday's move would mean an automatic increase in prices for daily goods.

"If you ride with me today and usually pay 10 Egyptian pounds, I will ask you for 15, because fuel prices are raised. That's normal, because when I go get food, what I used to buy with 10 Egyptian pounds becomes now for 15," he said.

"We don't know where we're headed with these prices."

On Wednesday, Prime Minister Mostafa Madbouly said prices of petroleum products will gradually increase until the end of 2025, adding that the government could no longer bear the burden of increasing consumption.

Egyptians have also endured blackouts, which Madbouly said had ended at the start of this week, as the country struggled to import sufficient natural gas to tackle the summer heat.

In April, the IMF estimated that Egypt will spend 331 billion Egyptian pounds ($6.85 billion) on fuel subsidies in 2024/25 and 245 billion in 2025/26.

The IMF's approval for the third review of the expanded loan program was originally expected on July 10, but was pushed back to July 29, with the lender attributing the delay to the finalisation of some policy details.

The IMF is expected to disburse $820 million to Egypt after concluding its review.

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Gold Near Record High; Investors Await Fed Chair Powell's Speech

FILE - Gold bars are shown stacked in a vault at the United States Mint, on July 22, 2014, in West Point, N.Y. (AP Photo/Mike Groll, File)
FILE - Gold bars are shown stacked in a vault at the United States Mint, on July 22, 2014, in West Point, N.Y. (AP Photo/Mike Groll, File)
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Gold Near Record High; Investors Await Fed Chair Powell's Speech

FILE - Gold bars are shown stacked in a vault at the United States Mint, on July 22, 2014, in West Point, N.Y. (AP Photo/Mike Groll, File)
FILE - Gold bars are shown stacked in a vault at the United States Mint, on July 22, 2014, in West Point, N.Y. (AP Photo/Mike Groll, File)

Gold prices rebounded and looked set to scale a fresh peak on Thursday, on mounting expectations for another US interest rate cut this year, while investors awaited Federal Reserve Chair Jerome Powell's address later today for more policy cues.
Spot gold climbed 0.4% to $2,668.05 per ounce, as of 0913 GMT, a few dollars away from the record $2,670.43 it hit on Wednesday.
US gold futures were up 0.2% to $2,691.20, reported Reuters.
"Gold price strength is feeding on itself just now. That’s to say momentum is driving speculative flows despite a rising US dollar and Treasury yields," said independent analyst Ross Norman.
"Powell's comments will be observed for indications about the depth of further cuts. But really it's a case of when, not if."
Last week, the Fed trimmed the benchmark policy rate by 50 basis points to 4.75%-5.00%. Traders now see a 62% chance of an additional 50 bps reduction in November, according to the CME FedWatch Tool.
Lower interest rates boost non-yielding gold's appeal.
Powell is set to give opening remarks later in the day at a conference, where New York Fed President John Williams and Fed Vice Chair for Supervision Michael Barr will also speak.
Markets will also scan the US jobless claims data on Thursday and the core personal consumption expenditure index - the Fed's preferred inflation indicator - on Friday.
Bullion has risen more than 29% so far in 2024, hitting record highs several times, fueled by the US rate cuts, safe-haven demand due to geopolitical and economic uncertainty and robust central bank buying.
"In the coming weeks, gold could set new records and we see $3,000 an ounce as the maximum extension of the bullish movement," analysts at Intesa Sanpaolo said.
"We forecast a 4Q24 gold average of $2,595, as some profit-taking could materialize towards year end."
Among other metals, spot silver climbed 0.9% to $32.16 per ounce, holding close to the four-month high it hit on Wednesday.
Platinum rose 1.8% to $1,005.61 and palladium gained 2.4% to $1,062.36.