Egypt’s fuel crisis and the cost of endless "exceptional circumstances"

The latest increase in fuel prices has intensified seven problems that are hardly new to Egyptians, neither in their nature nor in their causes or surrounding context. Yet this time they appear more complex within an economy growing increasingly fragile, as Egyptians’ ability to absorb such increases has weakened compared with the past.

The first problem is the declining capacity of a broad segment of Egyptians to bear any additional burden amid low incomes and a continuously rising inflation rate. This, in turn, pushes up the prices of essential goods, foremost among them food, medicine, clothing and housing.

The second problem is that the impact of rising fuel prices does not stop at what households spend on transportation, an expense that alone consumes a significant portion of wages and salaries. Instead, it spreads through the price of almost everything, from vegetables to electrical appliances.

Rising but rarely falling

This time, the increase is large, and indeed painful, compared with previous rounds. The price of a liter of gasoline 95, 92 and 80, as well as diesel, rose by three Egyptian pounds at once, an increase of more than 14%. The price of a 12.5‑kilogram cooking gas cylinder rose by 50 pounds, while the 25‑kilogram cylinder increased by 100 pounds—more than 22% in each case. The price of natural gas for cars rose from 10 pounds to 13 pounds per cubic meter, a 30% jump.

Although the political authorities consistently say the market is governed by supply and demand, Prime Minister Mostafa Madbouly’s statement that “if the war stops, the decisions taken regarding the adjustment of gasoline prices will be reviewed” has not been widely believed. Egyptians have grown accustomed to the government failing to honor such promises.

People have learned that when the price of something rises, it is rarely followed by a decline. This is the third problem.

Endless “exceptional circumstances”

The fourth problem lies in the public’s growing fatigue with what many describe as “treacherous decisions.” Any external event, they say, becomes an opportunity to raise fuel prices and other costs under the pretext of unavoidable circumstances.

Even if there is some truth to this argument in the current case, many Egyptians believe the government has already committed itself to implementing the agenda and instructions of the International Monetary Fund. It has little room to refuse or resist. After all, those who provide loans impose conditions, while bearing no responsibility—unlike the government—for the harsh social consequences of economic policies implemented for at least a decade.

The government justified the sharp increase in fuel prices by citing “the exceptional situation resulting from geopolitical developments in the Middle East and their direct impact on global energy markets, which have led to a significant rise in import and domestic production costs.”

It added that it is “closely monitoring market developments and costs while working to ensure the sustainability of petroleum and gas supplies for citizens and all sectors of the state.” The statement stressed that “any exceptional measures taken are part of the responsible management of current international challenges, while maintaining energy security and the stability of the local market as a top priority.”

But many Egyptians recall that the government’s “exceptional circumstances” seem never-ending. Officials previously invoked the COVID‑19 pandemic to justify price hikes, yet when the pandemic subsided prices never returned to their previous levels.

The government also cited the Russia‑Ukraine war, even though its effects were far less severe in countries neighboring the warring parties. Prices in Russia and Ukraine themselves did not rise to the extent seen in Egypt.

More recently, the Israeli assault on the Gaza Strip has been cited as another justification. Yet during the two years of war, Egypt opened the door to compensating for losses linked to the risks of shipping through the Suez Canal. The conflict also helped bolster the political leadership’s international standing after a period of relative diplomatic estrangement before the war.

Worse may be ahead

Public frustration has reached the point of sarcasm. Some Egyptians joke that “if a mule stumbles in Iraq, prices will rise in Egypt.” Others, ahead of Egypt’s recent World Cup qualification campaign, even worried that if the national football team qualified, the government might take advantage of the public’s celebrations and distraction to raise prices or float the pound.

The fifth problem concerns the government’s continued failure to protect citizens from those who exploit such exceptional circumstances. Some transport vehicle owners, as well as wholesale and retail traders, impose price increases on goods that far exceed the rise in fuel costs.

This problem is compounded by the fact that the state itself has become heavily involved in the economy—sometimes even practicing forms of monopoly—and can impose its will on various markets.

We followed the statement issued by the Ministry of Local Development on March 10, which warned against exploitation and reassured citizens that they would not bear additional “unjustified” burdens. The ministry promised a fair and carefully studied transport fare, strict monitoring on the ground, prevention of petroleum product hoarding at fuel stations and full transparency in announcing prices.

It also spoke of coordination among governorates and the involvement of citizens in monitoring violations. Yet Egyptians have heard similar assurances after every previous increase in fuel prices—without meaningful enforcement. As a result, such statements often feel like words suspended in empty space.

The sixth problem concerns weak public confidence in the government’s claim that it had already prepared for this emergency by securing fuel reserves. That claim seems at odds with the government’s rapid move to raise fuel prices sharply without waiting.

Many now fear that the war could drag on, increasing pressure on fuel supplies—especially with oil tankers beginning to be targeted in the Gulf and the continued suspension of Israeli gas exports, on which Egypt has relied heavily in recent years. This raises the possibility of yet another round of fuel price increases.

Limited relief

Finally, the seventh problem concerns the government’s ability to take measures that would genuinely ease the burden on citizens.

Madbouly has spoken of extending the decision to increase cash support for beneficiaries of the Takaful and Karama programs and for low‑income families holding ration cards. The extension—previously announced as part of a social protection package—would last for two additional months, until Eid Al‑Adha.

Yet soaring inflation has rendered such assistance almost weightless in the face of citizens’ rapidly growing needs for basic necessities. At the same time, poverty has expanded to levels unprecedented in Egypt’s contemporary history.