Egyptians woke up on Friday to the news that fuel prices across the country had climbed once again, marking the second such increase in 2025 and triggering a ripple of concern about the cost of living. The government’s decision, announced on October 17, raised prices on a wide range of fuel products by roughly 12%, with diesel and various grades of gasoline all seeing notable hikes. For a nation already grappling with persistent inflation, stagnant wages, and the fallout from multiple global crises, the move has immediate and far-reaching implications.
According to the Associated Press, the cost of a liter of diesel—a lifeline for public transport and goods movement—jumped from 15.50 Egyptian pounds ($0.33) to 17.50 pounds ($0.37). The price of 92-octane gasoline now stands at 19.25 pounds ($0.40), up from 17.25 pounds ($0.36), while 95-octane gasoline rose from 19 pounds ($0.40) to 21 pounds ($0.44). The 80-octane gasoline, a staple for many Egyptians, increased to 17.75 pounds per liter. Natural gas for vehicles, meanwhile, saw the sharpest spike, leaping by about 43% to 10 pounds per cubic meter. These changes, as detailed by Mada Masr and Egypt’s official gazette, are part of a broader government strategy to phase out energy subsidies and bring domestic prices in line with actual costs.
But why now, and why such a steep adjustment? The answer lies in a confluence of economic pressures and international obligations. Egypt’s adoption of an automatic fuel pricing mechanism in 2019 was a pivotal step toward linking domestic fuel prices to local production costs, global oil prices, and the ever-fluctuating currency exchange rate. The system, overseen by a committee under the Petroleum Ministry, allows for a 10% change in prices each quarter. Yet, as Mada Masr points out, the government has exceeded this margin multiple times, including with this latest hike. The rationale? Mounting production and import costs, a growing current account deficit, and the need to comply with the terms of an $8 billion loan agreement with the International Monetary Fund (IMF).
“The decision to fix prices until 2026 was based on the continued efforts of the petroleum sector to operate refineries at full capacity, settle arrears owed to partners, and offer them incentives to boost production and reduce import costs, which would help achieve relative cost stability and narrow the gap between costs and retail prices,” the Petroleum Ministry explained in its official statement, as reported by Mada Masr. The ministry also emphasized that domestic fuel prices would remain fixed for at least one year, providing a modicum of predictability in an otherwise volatile economic environment.
This policy shift comes on the heels of an earlier fuel price hike in April 2025—nearly 15% on certain products—and follows a series of austerity measures stretching back several years. The Egyptian government has repeatedly argued that such increases are necessary to “reduce the gap between the selling prices of petroleum products and their high production and import costs,” according to the Associated Press. The IMF, for its part, has consistently pressed Egypt to cut fuel, electricity, and food subsidies while expanding social safety nets for the most vulnerable.
The economic context is, to put it mildly, challenging. Egypt’s annual urban consumer price inflation stood at 11.7% in September 2025, down slightly from previous months but still painfully high for ordinary citizens. The government did raise the minimum monthly wage earlier this year—from 6,000 to 7,000 pounds (about $138)—but many Egyptians say their purchasing power continues to erode. The Associated Press notes that the cost of living has soared, with increases in subway fares and a weakening Egyptian pound compounding the strain.
External shocks have only made matters worse. Years of government austerity, the lingering effects of the COVID-19 pandemic, and the global economic tremors from Russia’s invasion of Ukraine have all taken their toll. More recently, the Israel-Hamas war in Gaza and Houthi attacks on shipping routes in the Red Sea have slashed Suez Canal revenues—a vital source of foreign currency for Egypt. With traffic being diverted around the tip of Africa, the country’s current account deficit widened to $2.2 billion in the second quarter of 2025, and imports of oil products rose to $500 million from $400 million a year earlier, according to central bank data cited by Egypt’s official gazette.
Amid this turmoil, the government has struggled to keep up with payments to international energy companies operating in the country, accumulating around $3 billion in arrears, as Mada Masr reports. The Petroleum Ministry has pledged to settle these debts and offer incentives to boost domestic production, hoping to reduce the need for costly imports. “The petroleum sector will continue running refineries at full capacity and provide incentives to its partners to boost production, reduce import expenses, and stabilize costs—with the aim of narrowing the gap between production costs and selling prices,” the government reiterated on Friday, according to the Associated Press.
Prime Minister Mostafa Madbuly, seeking to reassure a wary public, indicated last month that this might be the last major fuel price hike—at least if global prices remain stable. He also noted that diesel, due to its direct impact on production costs and inflation, would continue to be subsidized to some extent. Still, the government’s broader commitment to phasing out subsidies remains firm, with the IMF expecting Egypt to align domestic prices with actual costs by December 2025.
For many Egyptians, the future feels uncertain. The government’s promise to freeze fuel prices for a year offers some respite, but the underlying economic pressures are unlikely to dissipate soon. The IMF’s March 2025 review approved a $1.2 billion disbursement for Egypt, but also reiterated the need for subsidy cuts and fiscal discipline. The automatic fuel pricing mechanism, while designed to introduce transparency and market discipline, has also exposed the population to the shocks of global price swings and a weakening currency.
On the streets of Cairo and beyond, the latest price hikes are already being felt. Public transport operators, small business owners, and ordinary families are bracing for higher costs—not just at the pump, but across the board as transportation and production expenses ripple through the economy. The government’s efforts to expand social safety nets and raise wages have provided some cushion, but for many, it’s not enough to offset the relentless march of inflation.
As Egypt navigates this period of economic adjustment, the stakes are high. Balancing the demands of international lenders, the realities of global markets, and the needs of its people will test the government’s resolve and ingenuity. For now, Egyptians are left to adapt—again—to a new normal at the fuel pump, hoping that stability, once promised, will finally take hold.
