How will the increase in gasoline and diesel prices affect prices of other commodities? Will the Government be able to control the markets and prevent the traders from raising prices? Is it possible to increase gasoline and diesel prices while other products’ price remain unaffected? What would happen to various sectors that depend directly on gasoline and diesel, such as transportation, agriculture and tourism?
We addressed all these questions to economic experts and citizens.
Mohamed Mahmoud, a vegetable and fruit trader in the wholesale market, said, “The increase in gasoline and diesel prices is an indication of higher prices of other commodities over the coming period”.
He added, “This is merely the first step of a comprehensive plan to increase all prices. The increase in gasoline and diesel prices will have a direct effect on a large number of services. Cost of all transports as well as food and agricultural commodities, which are transported from one governorate to another, will be increased. Ashraf Mahrous criticized the timing of raising gasoline and diesel prices.
Mahrous stressed, “The government should have chosen a better timing to raise prices because most of Egyptian families are currently bearing great burdens. They will not even be able to benefit from the last increment as this increase will eat up a good chunk of this increment”.
He added, “There is a fear that there will be a further increase in prices of some goods and the citizen will pay the price either way and will have no choice but buying expensive goods and services”.
Within this context, economic analyst Abdul Fattah Fayed said, “The government emphasized that it cannot continue to support energy subsidies at the same current level as it currently aims to reducing these subsidies”.
Egypt consumes 3 million tons of gasoline and subsidies to gasoline amounts to EGP 2.4 billion and the remaining subsidies are given to butane gas and diesel consumers.
Fayed said, “The increase in gasoline and diesel prices will largely affect prices of commodities and agricultural crops. Moreover, agricultural crops will bear greater burden due to the increase in diesel prices given that the diesel fuel is used in irrigation and agricultural land preparation as well as transport of agricultural crops”.
Al-Husseini emphasized, “Prices of all food commodities will certainly increase over the coming period, especially transported commodities given the fact that prices of most of commodities cover costs of diesel and gasoline and therefore any increase in their prices will definitely affect other commodities”.
Moreover, the tour operators have been also affected by the increase in diesel and gasoline prices. An owner of tourist transport company asserted, “All tourist transport companies have increased cost of their flights following the increase in gasoline prices”. He noted, “Such increase has led to problems with those who booked tickets as most of them refused to pay the additional cost but companies maintained there position as it is not reasonable for these companies to bear this additional cost alone. Cost of most tourist buses has also been raised by not less than 30%”.
He added, “Transport cost will raise prices of other commodities which are likely to increase during the coming days”.
