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MENAFN - AFP - 07/07/2014
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(MENAFN - AFP) Egypt's President Abdel Fattah al-Sisi said Monday a decision to raise fuel prices was "bitter medicine" that should have been taken before, but was not as governments feared a backlash.

The authorities on Friday slashed state subsidies on petrol and diesel, sparking anger among taxi drivers and others affected.

"We have to take this bitter medicine," Sisi said in a televised national address commemorating Egypt's military crossing of the Suez Canal during the 1973 war against Israel, which took place on the 10th day of the Muslim holy month of Ramadan.

The ex-army chief, who toppled Islamist president Mohamed Morsi in July 2013 before himself being elected president by a landslide in May, has repeatedly advocated austerity to narrow the budget deficit.

The decision to cut fuel subsidies "has been delayed, it has been delayed for years", Sisi said, adding that "all (previous) governments were worried to take it".

The political turmoil unleashed by the ouster of strongman Hosni Mubarak in 2011 has devastated Egypt's economy, badly hitting key tourist revenues and investment.

Since then, successive governments have said subsidies - which made petrol in Egypt among the world's cheapest - must be lifted, but never took action, fearing a popular backlash.

"When you asked me to run for presidency, the agreement between me and you was that you bear with me," Sisi said, drawing a parallel with sacrifices endured by Egyptians during the 1973 war "to retrieve (their) dignity".

Authorities on Sunday also unveiled higher taxes on cigarettes and alcohol, and the government had previously warned that heavily subsidised electricity prices would be gradually raised over the next five years.

The state spends almost 30 percent of its budget on fuel and food subsidies, in a country where nearly 40 percent of the population of 86 million hovers around the poverty line.

Since the overthrow of Morsi, who was viewed with suspicion by regional powerhouses such as Saudi Arabia and the United Arab Emirates, Arab states in the oil-rich Gulf have pledged billions of dollars in aid to Egyptian authorities.


 






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