Stock market brokers work at the Egyptian Stock Market in Cairo on January 6, 2013
Stock market brokers work at the Egyptian Stock Market in Cairo on January 6, 2013. Cash-strapped Egypt on Monday hiked the price of subsidised cooking gas by 60 percent, triggering market chaos, officials and media reported, ahead of a visit by the IMF for talks on a $4.8-billion loan. © Khaled Desouki - AFP/File
Stock market brokers work at the Egyptian Stock Market in Cairo on January 6, 2013
AFP
Last updated: April 1, 2013

Price of cooking gas soars in Egypt

Cash-strapped Egypt on Monday hiked the price of subsidised cooking gas by 60 percent, triggering market chaos, officials and media reported, ahead of a visit by the IMF for talks on a $4.8-billion loan.

Ahram Online quoted an official from the domestic trade and supply ministry as saying the price of subsidised standard gas cylinders had been set at eight dollars ($1.15), from five pounds ($0.73) previously.

"Raising butane prices is one of the government's steps to rein in its subsidy bill, in an attempt to meet the International Monetary Fund's pre-conditions to secure a long-awaited $4.8-billion loan," the news website said.

Authorities believe the loan will help restore investor confidence in Egypt where unrest that accompanied the 2011 uprising that toppled Hosni Mubarak caused a significant drop in revenue from the once-lucrative tourism industry.

Foreign reserves have plunged from $36 billion to $13 billion in two years, and the budget deficit is increasing.

The IMF delegation is expected in Cairo in the coming days to resume talks on the loan.

The gas price hike sparked a work stoppage at warehouses across Egypt where the cylinders are kept, the state-run MENA news agency reported quoting Hossam Arafat, an official at the general federation of chambers of commerce.

The decision to raise the price was taken "suddenly" by the authorities without any prior notification given to managers of the warehouses and as a result triggered "confusion" on the market, Arafat said.

Ahram Online, the website of the pro-government Ahram newspaper, said 12 million Egyptian homes use gas cylinders for cooking and other domestic chores.

Only 4.5 million households in Egypt -- the Arab world's most populous nation with more than 80 million people -- receive gas through pipes.

The measure is the latest by the authorities to help shore up the economy.

Authorities have decided to partly close Cairo's international airport, shutting down two runways for four hours overnight from June "in order to save energy", civil aviation minister Wael al-Maadawi said on Monday.

Maadawi said airport revenues were not enough to cover the cost of keeping the runways open.

Only one runway, at Terminal 3 -- which serves as a regional hub -- will remain open 24 hours a day.

With the economic crisis biting Egypt has also witnessed increasingly frequent power cuts aimed at saving energy.

The oil ministry last week admitted it does not have money to buy enough fuel for all of its power stations.

President Mohamed Morsi's administration has been plagued by unrest and deadly clashes between protesters and police, blocking efforts to build broad-based support for a needed programme of economic reform.

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