Prime Minister Mostafa Madbouly has told Egyptians that tougher austerity measures could be in store if the Iran war drags on, saying the crisis caused by the conflict is unprecedented.
He also appealed to Egyptians to cut car journeys to save fuel.
“We must reduce journeys that are unnecessary so we don't reach the stage of an energy crisis,” Mr Madbouly said on Wednesday. “If, God forbid, we have a more serious problem [with energy prices], we will have to take more difficult measures, definitely more difficult.
“We must conserve energy as much as possible or we will adopt harsher measures,” he said, without specifying what these would be.
Mr Madbouly announced that the minimum wage would be increased by 1,000 pounds (about $18.5) to 8,000 pounds a month starting July 1 to help the majority of Egyptians cope with the higher cost of living.
Egypt's economy has been jolted since 2020 by the Covid-19 pandemic, the Russia-Ukraine war and later the conflict in Gaza, but the government says the Iran war is the worst crisis of all, primarily because of the surge in oil and gas prices.
The government last month raised domestic fuel and gas prices by as much as 30 per cent, reduced fuel allocations for government vehicles and ordered restaurants, cafes, stores, malls, theatres and cinemas to close earlier – at 9pm on weekdays and an hour later on weekends.
The value of the Egyptian currency has, meanwhile, been sliding, with the US dollar fetching 54 pounds compared with 47 on the eve of the outbreak of the Iran war on February 28.
The plunging pound and the rise in domestic fuel and gas prices have combined to push up food and transport prices, deepening the financial struggle of most Egyptians.
The government has also introduced one day of remote working for government and public sector employees and said it would make it two days if the war continues.
The fallout from the Iran war, now in its fifth week, has also sent Egypt scurrying to increase its stock of essential food items.
Mr Madbouly said on Wednesday that reserves of "strategic goods” – wheat, vegetable oils, corn, oil and gas – were sufficient for six months. He did not specify the stock levels of individual commodities, but added that the government was working to add two or three more months' worth of stocks.
Finance Minister Ahmed Kouchouk, also speaking on Wednesday, said Egypt will raise the procurement price of local wheat from about 2,225 pounds to 2,500 pounds per ardeb (150kg) for this year's harvest as part of its policy to increase stocks of essential commodities.
Egypt, which typically imports about 10 million tonnes of wheat a year, has targeted procurement of five million tonnes of local wheat this year, as it moves away from being one of the world's top wheat importers towards self-sufficiency.
Wheat has traditionally been a politically sensitive commodity in Egypt, where about 70 million of the country's 109 million population depend on a heavily subsidised flatbread variety called eish balady as their main staple.
