Egyptian fuel price hike

The fuel increase was highest for 80 octane gasoline which is used by many of the older and most common vehicles in Egypt. The price for 80 octane jumped 78 percent to the equivalent of $0.22 (0.16 euros) per liter.

On the other hand, diesel prices increased by 64 percent to 25 cents a liter and 92 octane rose 40 percent to 37 cents a liter.

Stations stopped selling 90 octane gasoline altogether.

Potential repercussions following the fuel increase could prove to be among the first major challenges for President Abdel-Fattah el-Sissi, who was elected last month. However, while promising to deal with the situation, Sissi has consistently preached a message of economic austerity and sacrifice during his political tenure, so these actions come as no surprise.

The former military chief also asked the government to alter the current Egyptian budget, which currently stands at $115 billion, the largest budget in Egypt's history. In doing so, Sisi hopes that that the country can reduce its budget deficit from 12 to 10 percent.

Sissi's amended budget also features a $6 billion reduction in the energy subsidy bill.

Currently, energy and food subsidies comprise over a quarter of Egypt's state budget. Egypt currently spends more than 30 percent of its budget on fuel and food subsidies since almost 40 percent of the population - 34 million people - are considered impoverished.

Sissi won the May election by about 97 percent of the vote, albeit with turnout of just 27 percent. Many view the former general as a strong leader who can kick start the Egyptian economy.

Sissi, who led the coup that ousted Islamist president Mohamed Morsi, won the presidency in elections around one year later. However, Morsi's Muslim Brotherhood movement still holds daily protests which could increase with the economic situation.

Since Morsi was overthrown a year ago almost 2,000 people have been killed.

as/msh (AP, Reuters)