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Egypt Hikes Domestic Fuel Prices

Cars are seen at a petrol station in downtown Cairo, Egypt June 19, 2018. REUTERS/Mohamed Abd El Ghany
Cars are seen at a petrol station in downtown Cairo, Egypt June 19, 2018. REUTERS/Mohamed Abd El Ghany
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Egypt Hikes Domestic Fuel Prices

Cars are seen at a petrol station in downtown Cairo, Egypt June 19, 2018. REUTERS/Mohamed Abd El Ghany
Cars are seen at a petrol station in downtown Cairo, Egypt June 19, 2018. REUTERS/Mohamed Abd El Ghany

Egypt introduced its latest round of fuel subsidy cuts on Friday, raising domestic prices by between 16 percent and 30 percent.

The price of widely used 92 octane grade petrol rose by 18.5 percent to 8 pounds ($0.4825) a liter, while lower quality 80 octane rose by 22.7 percent to 6.75 pounds ($0.4071) a liter, the petroleum ministry said in a statement.

Higher grade 95 octane fuel rose by 16.1 percent to 9 Egyptian pounds ($0.5428) a liter, and diesel rose by 22.7 percent to 6.75 pounds per liter. The price of cooking gas cylinders rose by 30 percent to 65 pounds for domestic use and 130 pounds for commercial use.

Scaling back fuel subsidies was a key plank of a three-year $12 billion economic reform package signed with the IMF in November 2016. Energy subsidies had eaten up as much as 20 percent of the government's budget in recent years.

The reforms also included a sharp devaluation of the Egyptian pound and led to rapid inflation that later cooled.

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Oil Rises on Upbeat China Data, Shaky Israel-Lebanon Ceasefire

FILE - Pump jacks work in a field near Lovington, N.M., April 24, 2015. (AP Photo/Charlie Riedel, File)
FILE - Pump jacks work in a field near Lovington, N.M., April 24, 2015. (AP Photo/Charlie Riedel, File)
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Oil Rises on Upbeat China Data, Shaky Israel-Lebanon Ceasefire

FILE - Pump jacks work in a field near Lovington, N.M., April 24, 2015. (AP Photo/Charlie Riedel, File)
FILE - Pump jacks work in a field near Lovington, N.M., April 24, 2015. (AP Photo/Charlie Riedel, File)

Oil prices rose on Monday, supported by strong factory activity in China, the world's second-largest oil consumer, and heightened tensions in the Middle East as Israel resumed attacks on Lebanon despite a ceasefire agreement.
Brent crude futures climbed 57 cents, or 0.79%, to $72.41 a barrel by 0700 GMT while US West Texas Intermediate crude was at $68.58 a barrel, up 58 cents, or 0.85%.
"Oil prices have managed to stabilize into the new week, with the continued expansion in China's manufacturing activities reflecting some degree of policy success from recent stimulus efforts," said Yeap Jun Rong, market strategist at IG.
This offered slight relief that oil demand from China may hold for now, he added.
A private-sector survey showed China's factory activity expanded at the fastest pace in five months in November, boosting Chinese firms' optimism just as US President-elect Donald Trump ramps up his trade threats.
Still, traders are eyeing developments in Syria, weighing if they could widen tension across the Middle East, Yeap said.
A truce between Israel and Lebanon took effect on Wednesday, but each side accused the other of breaching the ceasefire.
In a statement, the Lebanese health ministry said several people were wounded in two Israeli strikes in south Lebanon. Air strikes also intensified in Syria, as President Bashar al-Assad vowed to crush insurgents who had swept into the city of Aleppo.
Last week, both benchmarks suffered a weekly decline of more than 3%, on easing concerns over supply risks from the Israel-Hezbollah conflict and forecasts of surplus supply in 2025, even as OPEC+ is expected to extend output cuts.
The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, postponed its meeting to Dec. 5, sources told Reuters last week.
This week's meeting will decide policy for the early months of 2025.
Since the group's production hike had been widely expected, the market's focus may be on the extent of delay to sway crude prices, said IG's Yeap.
"An indefinite delay may be the best case for oil prices, given that earlier rounds of delays by a month or so have failed to drive higher oil prices in line with what OPEC+ intended."
Brent is expected to average $74.53 per barrel in 2025 as economic weakness in China clouds the demand picture and ample global supplies outweigh support from an expected delay to a planned OPEC+ output hike, a Reuters monthly oil price poll showed on Friday.
That is the seventh straight downward revision in the 2025 consensus for the global benchmark, which has averaged $80 per barrel so far in 2024.