Fuel Price Increases To Curb Consumption
BMI View: The impact of fuel price increases will temper demand for gasoline and diesel over the coming quarters. Inflationary pressures and minor opposition to the rise in fuel price will see the government delay further energy reform for around 12 months, though we see further subsidy reduction as necessary to manage the growing fiscal imbalance.
Egypt's new government has acted more rapidly than anticipated with regards to its subsidy reform programme. As of midnight July 5, the price of gasoline, diesel and natural gas were increased. Low grade gasoline was raised by 78% to around USD0.22/litre, high octane gasoline went up by 40% to USD0.38/litre, while diesel increased 64% to USD0.26/litre. We forecast the changes to slow the strong fuel consumption growth of previous years.
Fuel Consumption Growth To Slow
|Fuels Consumption To Wane|
|Gasoline And Distillate Fuel Consumption (000b/d)|