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The Egyptian government has raised the price of diesel by (Egyptian Pound) EGP 1.00 to EGP 8.25 per litre.

The government left gasoline(petrol) prices, which are also subsidized, unchanged, considering that it was only increased in March 2023.

The 14% raise on diesel shoots up the price of product by 22% since July 2022, when the government increased the price for the first time in five years in the context of the commodities shock triggered by the war in Ukraine.

Egypt’s Petroleum Ministry argues that the price of diesel to the government has risen to EGP 12.25 per litre as a result of both devaluation of the local currency and the higher prices in the global market. This increase should peg the subsidy at $2.1Billion (or EGP 64Billion) a year, from $2.64Billion (or EGP80Billion), the Ministry says.

Egyptians use diesel as the key fuel of public transport, as well as for vehicles that transport goods and raw materials around the country.

North Africa’s largest economy and the Arab World’s most populous country is an energy subsidy state. It pegs prices of piped natural gas for households and industry and converts over 4Billion standard cubic feet of gas every day into more than 40,000MW of electricity.

The Egyptian government has raised the price of diesel for the first time in three years, hoping to reduce its subsidy bill by 13% as global energy prices head north.

The action effectively adds diesel to the basket of petroleum products whose prices the government has raised, in the context of the ongoing global energy crisis.

Egypt is one of Africa’s largest energy-subsidy economies. The government subsidises piped natural gas to households; prices of gasoline and cost of diesel.

Egypt’s pricing committee has routinely raised the price of gasoline in the last 18 months, but it had not included diesel: the main fuel used in public transportation as well as transportation of commodities.

Egypt uses diesel in transportation than it uses gasoline contrary to many other countries.

The fuel pricing committee increased the price of diesel to 7.25 Egyptian Pound (EGP7.25) per litre from EGP6.75, as well as hiked petrol prices by up to 10%, the Petroleum Ministry said in a statement The new prices went into effect immediately and will remain unchanged until the beginning of the fourth quarter 2022.

North Africa’s largest economy and the Arab World’s most populous state had absorbed the extra cost of diesel after global fuel prices shot up on the back of the Russia-Ukraine war — and was facing an annual diesel subsidy bill of $3.3Billion EGP 63Billion, according to Mostafa Kamal Madbouly, the country’s Prime Minister. A liter of diesel had cost EGP 11 on average since April 2022, of which EGP 4.25 was subsidized by the government, costing it $285Million (EGP 5.4Billion), Mr. Madbouly explains, adding that the little hike should reduce the state’s subsidy bill to $2.9Billion (or EGP55Billion).

Gasoline (petrol) prices also rose as follows

95-octane is EGP 10.75 per litre, up 10.3% from EGP 9.75;

92-octane is EGP 9.25 per litre, up 5.7% from EGP 8.75;

80-octane is EGP 8.00 per litre, up 6.6% from EGP 7.50.

Mazut fuel oil prices rose by 8.7% to EGP 5,000 per ton for all industries except food and electricity producers, who continue to be charged EGP 4,200 per ton.

This is the sixth consecutive quarter petrol prices have risen. The price at the pump is now up 23-28% since last April, depending on which grade you’re putting in the tank.

But the country has a dilemma of declining value of its currency against the American dollar, meaning that prices, even as they have adjusted, remain far below global market levels. What’s more: foreign reserves have plummeted to 5-year lows, as subsidy spending surges.

“These new price increases were substantially less than the 13% fall in the value of the Egyptian pound against the US dollar over the previous quarter (from $1=E£16.1 to $1=E£18.5)”, reports MEES, a industry trade journal which publishes weekly analyses of the Middle East’s oil and gas developments. “As such the latest prices are actually lower in dollar terms than those three months earlier. Indeed, in dollar terms the latest gasoline prices are only fractionally higher than those two years earlier at the height of the COVID 19-induced slump in oil demand when global oil prices were well under half current levels”, MEES says.

British Petroleum Southern Africa (bpSA) has sold one of its 100% owned liquid bulk fuels import terminals to black women-owned and managed independent petrochemicals company Wasaa in what is regarded as a landmark transformation deal.

The terminal is located at the Port of East London, in South Africa’s Eastern Cape Province.

Prior to the sale, bpSA had six fuel storage terminals, two 100% owned by bpSA, (one of which is now sold); two (Alrode and Pretoria) jointly owned with Sasol (50/50); one (Island View) jointly owned with Shell (50/50) and one (Rustenburg) owned by Astron (⅓), bpSA (⅓) and Engen (⅓). We invest in our terminal infrastructure to provide world class road and rail gantries, fire-fighting capability, tanks and pipelines.

Johannesburg-based Wasaa is a subsidiary of the Wasaa Group, which was founded and is led by Nokwanele Qonde, aranking South African female entrepreneur.

In line with the agreement, Wasaa Terminals has also acquired 100 percent of the terminal’s movable assets and a 20 percent stake in the berth to terminal pipeline. Sout Africa’s top finance website Moneyweb reports that Wasaa Terminals began taking over terminal responsibilities on December 6, 2021.

bpSA will retain the operations of its transport business operating outside of East London. Wasaawill provide terminal storage and handling services to bpSA in the Eastern Cape port city.