Egypt plans to slash fuel and electricity subsidies in its 2019/2020 financial year, the finance ministry's draft budget shows, but raising fuel prices closer to international levels could turn out to be an even more severe burden on the population, potentially leading to protests that would add to the ones in other African oil producing nations like Sudan and Algeria.
Under the 2019/2020 budget bill-which needs parliament approval to become law-Egypt plans to further slash fuel and electricity subsidies, by 40.5 percent for fuel and by 75 percent for electricity, in the financial year 2019-2020, Middle East Monitor reports, citing the Egyptian finance ministry.
Egypt, which has been heavily borrowing from the International Monetary Fund (IMF) in recent years to prop up its ailing economy, has promised to cut subsidies in order to continue receiving international financial support. However, the fuel subsidies mean that many Egyptians are struggling with the higher prices of gasoline, diesel, and other fuels, and can't afford many necessities amid rising inflation.
In the middle of last year, Egypt hiked gasoline prices by up to 50 percent, as it is seeking to meet reform requirements for funds extended by the IMF, but the gradual removal of the fuel subsidies has made ordinary Egyptians angry with austerity measures.
After the subsidy cuts last year, Egyptians took to Twitter to demand that their president Abdel Fattah al-Sisi resign.
The upcoming round of another fuel subsidy cuts in Egypt could stir dissent and spark protests in yet another African country with oil and gas reserves.
Over the past weeks, protests in Algeria and Sudan have resulted in the two countries' respective long-term presidents leaving office.
Algeria's president of 20 years, Abdelaziz Bouteflika, stepped down at the beginning of April, following weeks of protests.
A week later, Omar al-Bashir, who had ruled Egypt's neighbor to the south, Sudan, since 1989, was toppled from power by the military and placed under "heavy guard", following months of protests against the government and its handling of a severe economic crisis in the country.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More