Egypt plans to remove subsidies on most electricity and petroleum products starting in fiscal year 2026–2027, except for diesel and household-use liquefied petroleum gas (LPG), a Finance Ministry source told Al Manassa on Thursday.
The policy shift will be included in the draft budget due to be presented to Parliament in March, the source said, requesting anonymity due to the sensitivity of the matter.
In the current fiscal year, the government allocated 150 billion Egyptian pounds to energy subsidies, equally split between electricity and petroleum products. The fuel subsidy line has already been slashed by over 50% from 154.4 billion pounds in the previous year.
The move comes as part of ongoing negotiations with the IMF over the seventh and eighth reviews of Egypt’s extended loan program, the source said. The talks have centered on the gradual elimination of state subsidies on public services, while retaining protections for low-income households.
IMF pressures intensify subsidy rollback
The development follows Prime Minister Mostafa Madbouly’s remarks Wednesday, in which he said the latest IMF agreement—covering the fifth and sixth program reviews—would not impact ordinary citizens.
Speaking at the weekly press conference following the Cabinet’s regular meeting, Madbouly said, “Quite clearly, the targets agreed upon with the IMF until the end of the program do not include any measures that would place additional burdens on citizens, but are limited to structural reforms related to the performance of the Ministry of Finance, improving the investment climate and achieving specific economic targets for the state.”
He added that no new burdens would be imposed on consumers in the energy sector. “There are no such measures in the agreement because we’ve already implemented necessary corrective steps, which we, as a government, planned and aligned with the IMF. It’s important that we all understand this.”
$2.8 billion disbursement in January
According to the Finance Ministry source, Egypt expects to receive $2.5 billion from the IMF and $274 million from the IMF’s Resilience and Sustainability Facility on Jan. 25. The bulk of the disbursement will go toward external debt repayments and bolstering export support.
The government had previously raised fuel prices twice this year—first in April, then again in October—as part of its commitments to reduce the fiscal burden of subsidies.
At the time of the October hike, the Petroleum Ministry pledged to freeze domestic fuel prices for a year, citing local and global instability. “Following that increase and in view of ongoing events locally, regionally, and internationally, the government decided to fix petroleum product prices in the local market for a minimum of one year,” the ministry said.
Economists and rights groups have consistently warned that Egypt’s decade-long effort to liberalize fuel pricing has exacted a heavy toll on household budgets and fueled persistent inflation.
The removal of remaining subsidies could deepen economic pressures for millions of families already contending with soaring prices, they say.
