Egypt has raised domestic fuel prices by as much as 17 percent, just as inflation accelerated to its highest level in seven months, underscoring the vulnerability of Africa’s second-largest economy to rising global energy prices and escalating tensions in the Middle East.
The price increases, announced Tuesday by the petroleum ministry, come as global oil markets react to disruptions caused by the ongoing United States.–Israeli conflict with Iran, which has threatened energy flows from the Middle East.
“This comes in light of the exceptional situation resulting from geopolitical developments in the Middle East and their direct effects on global energy markets,” the ministry said in a statement.
The move follows comments by Prime Minister Mostafa Madbouly on March 3 that the Arab nation might adopt “exceptional measures” if global fuel prices surge due to the conflict.
Oil volatility drives policy shift
Global energy markets have become increasingly volatile as the war disrupts shipping routes and production across parts of the Middle East.
Benchmark Brent crude briefly surged nearly 30 percent to $104 per barrel early Monday — the highest level since Russia’s 2022 invasion of Ukraine — before retreating to about $90 per barrel in the evening after US President Donald Trump said the conflict could end “very soon”.
For Egypt, which relies heavily on imported fuel and energy products, such price swings quickly translate into pressure on public finances and domestic prices.
Fuel prices jump across products
The latest adjustments, ranging from 14 percent to 17 percent, mark the first fuel price increase in 2026 and follow a hike of 10.5 percent to 12.9 percent in October last year. At the time, authorities had indicated domestic prices could remain frozen for up to a year.
Diesel — one of the most widely used fuels in the country — rose by 3 Egyptian pounds to 20.50 pounds per litre, from 17.50 pounds previously.
Gasoline prices also increased sharply, with 80-octane gasoline rising to 20.75 pounds per litre, 92-octane climbing to 22.25 pounds, and 95-octane increasing to 24 pounds.
Inflation rises for first time since November
The fuel price increase comes as inflationary pressures are already intensifying.
Urban consumer inflation rose for the first time in four months to 13.4 percent in February, the highest level since July 2025, up from 11.9 percent in January, according to data from the state statistics agency CAPMAS.
On a monthly basis, prices rose 2.8 percent, the fastest pace in a year and more than double January’s 1.2 percent increase.
The acceleration was driven largely by faster price growth in food and non-alcoholic beverages, housing and utilities, clothing, and recreation services, while inflation remained broadly stable in transport and hospitality.
Monetary policy dilemma, inflationary pressures intensify
The inflation rebound complicates the outlook for monetary policy.
In February, the Central Bank of Egypt cut its benchmark interest rate by 100 basis points to 19 percent, the second consecutive reduction as inflation eased earlier in the year and the currency stabilised.
However, the renewed surge in oil prices and rising geopolitical risks could force policymakers to reconsider the easing cycle.
