Egyptians woke up on October 17, 2025, to the news of another sharp rise in fuel prices—a move that has become all too familiar in recent years. According to Reuters and the country's official gazette, the government increased prices on a wide range of petroleum products by 10.5% to 12.9%, marking the second such hike this year. The last increase, in April, saw prices jump nearly 15%. These changes are part of a broader push by the government to rein in ballooning subsidies and address the country's persistent budget and current account deficits.
The Ministry of Petroleum announced that diesel, Egypt's most widely used fuel, would rise by 2 Egyptian pounds to 17.50 pounds per liter (about $0.042). Gasoline prices climbed as well: 80 octane now costs 17.75 pounds per liter, 92 octane is at 19.25 pounds, and 95 octane reached 21 pounds per liter. The ministry emphasized that these new prices will be frozen for at least one year, a measure intended to provide some predictability amid ongoing economic uncertainty. "Fuel prices will remain fixed in the local market with no further increases for at least one year," the government said in a statement posted to Facebook, as reported by AP.
This latest round of price hikes is not happening in a vacuum. Egypt has faced years of economic turbulence, with inflation soaring and the Egyptian pound losing ground against foreign currencies. As AP noted, annual urban consumer price inflation hit 11.7% in September 2025, down slightly from previous months but still painfully high for ordinary Egyptians. The government has responded with a series of austerity measures, including subsidy cuts, wage increases, and efforts to attract foreign investment. Earlier this year, the minimum monthly wage for both public and private sector workers was raised to 7,000 pounds ($138), up from 6,000 pounds ($118.58).
Behind these moves lies a complex web of domestic and international pressures. Egypt is currently operating under an $8 billion loan program with the International Monetary Fund (IMF), which has pushed the government to align domestic fuel prices with global market levels and reduce subsidies across the board. The IMF's stance is clear: Egypt must cut spending on fuel, electricity, and food while simultaneously expanding social safety nets to protect the most vulnerable. In March, the IMF completed its fourth review of Egypt's economic reform program, approving a $1.2 billion disbursement to help shore up the country's finances.
As part of the deal, Egypt has pledged to reduce energy subsidies and bring domestic prices in line with real costs by December 2025. The government has confirmed it will maintain partial subsidies on diesel, even if that means raising the prices of other fuels above cost to keep the budget in check. According to Reuters, the government is also paying off arrears to foreign partners, keeping refineries running at full capacity, and providing incentives to boost domestic production and reduce import dependency. In the second quarter of 2025, Egypt's current account deficit stood at $2.2 billion, with petroleum product imports rising to $500 million from $400 million the previous year, as highlighted by the Central Bank of Egypt.
But these reforms come at a steep price for ordinary Egyptians. Higher fuel prices ripple through the economy, increasing the cost of goods and services and straining household budgets. Public transportation, which relies heavily on diesel, is particularly affected. As AP put it, "Egyptians have been grappling with soaring inflation as they navigate rising daily costs that reached another high last year." The government faces a delicate balancing act: cut subsidies too quickly, and risk social unrest; move too slowly, and the budget deficit widens, jeopardizing future IMF support.
The latest fuel price freeze is an attempt to walk this tightrope. By holding prices steady for at least a year, authorities hope to anchor inflation expectations and give families and businesses some breathing room. At the same time, the move signals to the IMF and international investors that Egypt remains committed to tough fiscal reforms. According to the official gazette, the freeze is justified by "global and regional economic pressures"—a reference to ongoing challenges like the fallout from the coronavirus pandemic, the lingering effects of Russia's invasion of Ukraine, and regional instability, including the Israel-Hamas war in Gaza.
External shocks have only made things harder. The Houthi attacks on shipping routes in the Red Sea have slashed Suez Canal revenues—a major source of foreign currency for Egypt. With traffic diverted around the tip of Africa, the government has lost a key revenue stream just when it needs every dollar. These setbacks have forced authorities to double down on reforms and seek additional IMF support, leading to the recent expansion of the bailout package to $8 billion.
Energy partners and refiners, meanwhile, stand to benefit from the government's commitment to full-capacity operations and timely debt payments. The petroleum ministry stated that refineries will continue operating at full capacity and that arrears to foreign partners are being paid to boost domestic output and reduce import dependency. These measures, they hope, will eventually lower the country's energy import bill and help stabilize the current account.
Still, analysts caution that the road ahead is fraught with risk. While the price freeze may stabilize the economy in the short term, sustained pressure from the IMF could lead to renewed subsidy cuts in 2026. There is also the question of whether higher pump prices will actually translate into reduced energy consumption and lower import bills—a key goal of the reform program. For now, Egyptians are bracing for higher costs and hoping that the promised social safety nets will be enough to cushion the blow.
As the country moves forward, all eyes will be on the government’s ability to manage these competing pressures. The stakes are high: get it right, and Egypt could finally turn the corner on years of economic instability; get it wrong, and the risk of public frustration—or even unrest—remains very real. For now, the government is betting that a year-long freeze on fuel prices will buy it enough time to stabilize the economy and chart a path toward sustainable growth.
Egypt’s journey to balance its books and secure its economic future continues, with millions of ordinary citizens feeling the effects at the pump and beyond.