Recent Developments in Egypt’s Fuel Subsidy Reform Process
In July 2014, Egypt introduced long-awaited energy subsidy cuts. These had been in the pipeline for over five years, but repeatedly delayed by political instability.
Their announcement was therefore seen as a sign of consolidation by the new President, Abdel-Fattah al-Sisi, as well as a positive signal to external investors. With energy subsidies habitually driving a large, structural fiscal deficit, and constant problems of shortages, low fuel and electricity prices were widely seen as a luxury that Egypt could no longer afford. The most significant step was the 64 per cent hike in diesel prices, but similar increases affected electricity and a wide range of refined products—the most notable exclusion being heavily subsidized liquefied petroleum gas (LPG). Moreover, the subsidy reductions were set out as the first step in a five-year program to eliminate energy subsidies entirely (again, excluding LPG).
This paper seeks to outline the background to Egypt’s move, assess its implementation and the public response, and to analyze future probabilities. It concludes by drawing out lessons for other countries facing similar pressures./p>
You might also be interested in
The Strait of Hormuz Crisis Emphasizes Why Canada Should Move Away From Oil and Gas—Not Expand It
The closure of the Strait of Hormuz cut off roughly 25% of the world’s seaborne oil and 20% of LNG trade. In response, many countries are diversifying supply chains and increasingly ramping up domestic renewable capacity to improve energy security. Meanwhile, the Government of Canada has taken steps to expand oil and gas production.
Managing Energy Price Crises
This report outlines a strategic decision framework policy-makers can use when responding to fossil fuel price shocks.
Removing a Fossil Fuel Subsidy Is a Means, Not an End—The transition is the point
COFFIS is an international coalition working to phase out fossil fuel subsidies. Kim Solberg, part of the team that founded COFFIS, sits down to explain what made it possible—and why, in her view, a subsidy can only be removed as part of the wider transition it's meant to serve.
IISD Submission to the Belém Mission to 1.5
This submission is made in response to the invitation from the United Nations Climate Change Conference (COP) 29, COP 30, and COP 31 Presidencies on the Belém Mission to 1.5.