Egypt has announced a fuel price increase today for the second time in four months, part of the economic reforms mandated by the International Monetary Fund (IMF) to unlock hundreds of millions in new loans. According to Egypt’s official gazette, gasoline prices will rise by up to 15 percent just ahead of the IMF’s review of its $8 billion loan program. The new prices will take effect tomorrow, and according to Egypt’s Ministry of Petroleum and Mineral Resources, gasoline will now be priced between 12.25 and 15 Egyptian pounds (approximately $0.25 to $0.31) per liter.

Diesel, one of the most commonly used fuel types in Egypt, will also see a price increase; it will rise from 10 Egyptian pounds ($0.21) to 11.50 pounds ($0.24). As part of its IMF bailout agreement, Egypt has committed to a plan to gradually reduce fuel subsidies, which constitute a significant portion of the country’s strained budget. The government initiated the first round of price hikes in March to bring domestic prices more in line with international markets, aiming to eliminate fuel subsidies entirely by the end of 2025, according to government spokesperson Mohamed el-Homossan.

The hike in fuel prices comes at a time when Egypt is facing its worst economic crisis in over a decade. Rising foreign debt has led to severe inflation and a series of consecutive devaluations of the local currency. Inflation peaked at nearly 40 percent last year but has since decreased to 27.5 percent as of June. Official statistics indicate that almost 30 percent of Egyptians live in poverty.

In addition to the economic crisis, Egypt has been embroiled in regional tensions, including violent conflicts in neighboring Gaza and Sudan. Attacks from Iranian-backed Yemeni Houthi forces on shipping in the Red Sea have also impacted revenues from the Suez Canal, which has experienced a 23.4 percent drop in revenue for the financial year 2023-24 compared to the previous year.

The IMF has insisted that Egypt implement comprehensive reforms to restore its economy, including transitioning to a liberal exchange rate regime, reducing public spending, and incentivizing private investments.