CAIRO (Reuters) – Egypt will not raise the price of its heavily subsidised bread, set at 20 piastres per loaf, even after diesel prices have increased, Supply Minister Sherif Farouk said in a statement on Thursday.
Egypt, one of the world’s biggest wheat importers, raised the price of subsidised bread by 300% in June for the first time in decades, a politically sensitive decision that had been delayed for years.
The minister’s remarks came after the government raised the prices of a wide range of fuel products earlier on Thursday, including gasoline and diesel, one of the most commonly used fuels. Both are used in the manufacturing process of bread.
The government raised fuel prices four days before the International Monetary Fund (IMF) conducts a third review of its expanded $8 billion loan programme for the country. Slashing subsidies is part of the agreement.
“The state will continue to bear the difference in production costs, if any, and pay them to bakery owners through the General Authority for Supply Commodities (GASC),” Farouk added.
About two-thirds of Egypt’s population benefit from a programme that gives them five round loaves of bread daily at the subsidised price. An attempt to change the subsidy system led to riots in 1977.
(Reporting by Sarah El Safty, Writing by Nayera Abdallah; Editing by Kevin Liffey and Emelia Sithole-Matarise)
