Egypt has raised domestic fuel prices sharply as part of a multi-faceted effort to stabilize the country’s economy amidst persistent fiscal pressure and regional turbulence. Effective October 17, 2025, all grades of gasoline, diesel, and compressed natural gas used in vehicles saw their prices climb by 10-13%. This marks Egypt’s second fuel price hike in 2025, following an earlier adjustment in April.
Prices are now set at EGP 21.00 per liter for 95-octane gasoline, EGP 19.25 for 92-octane, EGP 17.75 for 80-octane, and EGP 17.50 for diesel. CNG for vehicles is now EGP 10 per cubic meter. The government said it will freeze these rates for at least a year, citing the necessity for economic predictability in a volatile global market.
These changes are part of Egypt’s IMF-backed reform agenda, which calls for subsidy reduction and fiscal consolidation. In exchange, Egypt has secured multi-billion-dollar loan packages intended to shore up foreign reserves and avert a balance-of-payments crisis.
While the immediate goal is to cut the budget deficit and reduce strains on government finances, these measures carry enormous risks. The price hikes are expected to drive up transportation and commodity costs, disproportionately affecting lower-income Egyptians. However, the government stresses that stabilizing the macroeconomic picture is critical to preventing more severe disruptions down the line. Alongside subsidy cuts, the state is expanding social safety nets to cushion the impact on vulnerable populations.
Egypt’s pricing decisions unfold amid increased pressure on energy markets stemming from escalated regional conflicts, shipping disruptions in the Red Sea and Suez Canal, and global oil price uncertainty. These global dynamics amplify the challenge for countries like Egypt that are heavily reliant on imported fuel and exposed to currency volatility.
Domestically, the government is working to align fuel prices with international levels, a move seen as essential for continued IMF support and for attracting investment critical to national security. In announcing the freeze on price hikes, Cairo is signaling its intent to maintain stability in the face of external economic shocks and geopolitical risk that could reverberate through the wider region.
Already, ordinary Egyptians are feeling the effects of the fuel price hikes in nearly every aspect of daily life. Transportation costs have surged, especially since diesel—a lifeline for public buses, delivery vehicles, and agriculture—rose from EGP 15.50 to EGP 17.50 per liter. This increase ripples through food distribution, market prices, and local commerce. Recently, essential goods such as vegetables and dairy saw double-digit monthly increases, with vegetables up 12.2% and dairy products rising 1.3% in September alone. Wage growth and social support have struggled to keep pace with the cost of living, pressuring families to reduce consumption or seek additional work.
Industry sectors are also being reshaped. The petrochemicals industry, which accounts for 12% of Egypt’s industrial output and generates $7 billion in annual revenue, faces higher input costs and pressure on profitability. Manufacturing, agriculture, and freight—all fuel-dependent—have seen operating costs climb, threatening both margins and job stability. The government, meanwhile, has halved its fuel subsidy budget to EGP 75 billion, aiming to prioritize long-term fiscal health over short-term relief.
Looking ahead, the latest price action positions Egypt at a difficult crossroads. Continued subsidy reforms may bring fiscal relief and bolster international confidence, but at the cost of potential social unrest if compensatory measures fall short. The successful calibration of economic reform and social stability will carry significant weight, not only for Egypt’s domestic trajectory but for its regional role amid shifting alliances and persistent volatile energy markets.
