A government source told Al Manassa that a study prepared by the Egyptian General Petroleum Corporation (EGPC) concluded that the average global price of Brent crude during the second quarter of this year was $8 higher than the price projected in the state budget, supporting a decision to raise fuel prices.
The source, an official at the EGPC who requested anonymity, said the study was prepared ahead of the next meeting of the Fuel Automatic Pricing Committee (FAPC), scheduled for next August, noting that “the average oil price exceeding $80 per barrel supports a move to increase fuel prices.”
Although the FAPC periodically reviews fuel prices, the final decision on pricing remains primarily political. Media reports show that the president has previously rejected government recommendations to increase prices.
The source said that “the average oil price during the second quarter reached about $83 per barrel, around $8 higher than the $75 per barrel assumed in the state budget,” adding that “every $1 increase in the price of a barrel of oil costs the state an additional 3 to 4 billion Egyptian pounds over the course of the fiscal year.”
Brent crude futures rose sharply during March, April, and May as US-Iran confrontations escalated, exceeding $100 per barrel in some trading sessions. However, as prices declined in June due to efforts to de-escalate the war, media figures asked the prime minister why fuel prices had not been reduced. The prime minister responded that the most recent price increase in March had not been sufficient to offset the global rise in crude prices during the US war on Iran.
With US-Iran confrontations resuming, hopes of lower oil prices have receded as Brent crude futures have climbed again to $94.5 per barrel.
The source said the US dollar exchange rate is an additional factor supporting higher fuel prices. “The government’s estimates for the 2026/27 state budget are based on an exchange rate assumption of 47 pounds to the dollar, while the current exchange rate exceeds 51 pounds to the dollar. The Fuel Pricing Committee takes this into account before deciding fuel prices in the domestic market.”
The government has sharply reduced its allocation for petroleum product subsidies in the current fiscal year to 15.8 billion pounds, compared with 75 billion pounds in the previous fiscal year.
