Egyptians angered by rising food prices caused by increase in fuel costs

Government rise in fuel prices has had effect on cost of transport and food

Egyptians said that food prices had risen again. Photographer: Islam Safwat / Bloomberg

Egyptians reacted to a rise in fuel prices with anger and disappointment, after hopes had been raised that the government's recent foreign investment deals could have brought inflation down.

The country’s fuel pricing committee on Friday increased prices of all grades of octane by one pound and raised diesel prices from 8.25 to 10 Egyptian pounds a litre.

The committee attributed the increase to a rise in global oil prices as a result of the wars in Gaza and Ukraine.

The increase in diesel prices has played into further inflation of basic goods, including food, as transport becomes more expensive.

“Since Friday, every kind of vegetable I bought has increased by at least two pounds as well. Not to mention milk, which also rose since the start of Ramadan by six pounds,” said Sabah El Sayed, 41, who has five children.

“Since Thursday, my suppliers raised the prices of the vast majority of the items in my shop by at least two Egyptian pounds,” Cairo grocery shop owner Helmy Fouad, 47, told The National.

“Everything in my store except for tomatoes” is now more expensive, he said.

“I was told by [suppliers] each time I enquired that it was to account for increased fuel expenses,” he said.

Mohamed El Homsany, a spokesman for the Egyptian Cabinet, spoke about the issue on television on Sunday. He said he expected food prices to fall along with a drop in the value of the US dollar against the Egyptian pound.

“We expect food prices to come down very soon. The Prime Minister is conducting meetings with the country's Chambers of Commerce,” he said during a phone-in to a state-sponsored talk show.

His statement followed a Cabinet announcement that the government would be increasing its imports of essentials by 20 per cent to ensure that there is enough supply to combat profiteering traders, who have been repeatedly blamed by the government as the reason food prices are so high.

The government has signed investment deals with the UAE, the IMF, the EU and the World Bank worth about $50 billion in total. These were partly aimed at providing the government with sufficient liquidity to keep parallel currency markets under control and hold prices in check. Exorbitant exchange rates on black market dollars had driven up the country’s import bills, which in turn has pushed prices up.

Transport costs rise

Bus fares had also gone up by at least one pound since Friday, both for government-operated buses and unofficial microbuses operated by the private sector.

“I rely on microbuses because my home is outside the routes of public buses,” said Ms El Sayed.

“But the problem is that unlike public buses and the metro, microbuses are not regulated by the government, so each driver can increase their fare by however much they see fit based on their own expenses. So some increased by one pound and others increased by three pounds.

“And I have to pay because they know that public buses don’t cover their routes and that there really isn’t an alternative.”

A microbus driver told The National he had increased his fares by two pounds on Friday and then increased them by a pound on Sunday.

“What the customer doesn’t understand is that when diesel prices went up, so too did the prices of engine oil and tyres,” said Ahmed Yehya.

“I understand that many people just think it’s one pound for fuel and the rest they think I am being unfair, but it isn’t fair for me to carry those costs alone when everything is getting more expensive for me as well.”

Many Egyptians in rural provinces earn their living by hiring lorries to food manufacturers who want to transport fruit and vegetables.

However, such drivers, whose operations rely entirely on diesel, have, unlike microbus drivers, been unable to increase their rates because of resistance from the food manufacturers they work for.

“I don’t have the same power as a microbus driver has over his customers. Since Friday, my costs to transport one seven-tonne shipment of strawberries from Beheira to Cairo [around 200 kilometres] has risen by around 200 pounds,” said Alaa Madina, a farmer and driver who transports shipments of food from the Nile Delta to food processing factories around the country.

“Last night, a group of drivers went to speak to the supplier we work with to discuss an increase in our fares. He refused outright and said that whoever didn’t like it could be easily replaced.”