5/29/2024–|Last updated: 5/29/202407:31 PM (Mecca time)
Egyptian Prime Minister Mostafa Madbouly said, in a press conference on Wednesday, that Egypt (the largest wheat importer in the world) will raise the price of a loaf of subsidized bread from 5 piasters to 20 piasters, starting next June.
The Minister of Supply, Ali Al-Moselhi, added at the same conference that the new price represents 16% of the cost of the loaf, which rose to 125 piasters from 115 piasters last year.
Al-Moselhi explained that Egypt consumes 8.5 million tons of wheat annually in the manufacture of subsidized bread.
The Ministry of Finance stated last March that it would allocate about 125 billion pounds ($2.66 billion) to support bread in the budget for the current fiscal year 2024/2025, and about 147 billion pounds ($3.1 billion) to support petroleum products.
The day before yesterday, Madbouly said that the loaf of bread will remain subsidized, but “its price must be moved in proportion to the terrible increase in prices.”
Madbouly said that local wheat production provides only 35-40% of the subsidized bread needs.
Lifting is necessary
Madbouly said that raising bread prices is necessary, due to the global crisis and the Russian-Ukrainian war, which raised the price of Erdib (150 kilo) wheat globally from $260-270 to $540, while the state set the supply price at 1,100 pounds ($23) during the fiscal year 2023. /2024.
He pointed out that the matter prompted the government to approve an exceptional supply incentive worth 400 pounds ($8.5), which led to raising the price of supplying ardeb last year to 1,500 pounds ($31.8).
Madbouly explained, “This year we started the price of supplying ardeb at 1,250 pounds ($26.5) according to prices and targets, and before the start of the growing season we announced an increase in the price to 1,600 pounds ($34) in order to encourage the farmer to supply.”
Fuel
The day before yesterday, the Egyptian Prime Minister touched on the cost of energy prices, pointing out that diesel prices will remain subsidized, but the prices of other petroleum products must balance by the end of 2025.
He stressed that Egypt is developing scenarios to stop reducing electricity loads with the end of daylight saving time in November or December next year at the latest.
Egypt’s consumption bill for petroleum products amounted to 55 billion dollars during the past year, of which 33 billion dollars came from Egyptian products and 22 billion dollars from the foreign partner and what is imported from abroad.
Next week, Egypt will likely begin paying 20%-25% of the arrears owed to foreign energy companies, according to Madbouly’s statements.
More than 60% of Egypt’s natural gas production is directed toward consumption, and extracting it costs the state about $4.25 per unit, while it is sold to the Ministry of Electricity for only $3, according to Madbouly’s statements.
Egypt also imports diesel at a rate three times the real value in the local market. Despite this, there is still an urgent need for other quantities of gas and diesel to meet the annual increasing needs of the population.
