Egypt’s Automatic Pricing Committee for Petroleum Products is preparing to meet in September to review fuel prices and determine the pricing structure to be applied through the end of December 2026, after its meeting scheduled for last July was cancelled, according to an official in the petroleum sector who requested anonymity.
The committee is considering two scenarios for petroleum product prices in the final quarter of 2026: the first is to raise prices in response to higher fuel procurement costs, while the second is to keep them unchanged or postpone any increase pending calmer oil markets and a stable exchange rate, according to the source and other officials who spoke this week.
Oil and exchange rates put pressure on costs
The meeting comes as average oil prices reach $100 a barrel, compared with the $75 a barrel assumed in Egypt’s budget for the current fiscal year, an increase of 33%. The official said every $1 increase in the price of a barrel of oil adds between 3 billion and 4 billion Egyptian pounds in annual budgetary costs, depending on demand and the cost of procuring the products.
The dollar exchange rate is another factor in the decision, particularly after surpassing 51 Egyptian pounds, increasing the cost of importing crude and petroleum products. The committee is coordinating with the Egyptian General Petroleum Corporation to prepare a report on global oil price developments during the second and third quarters of the current year, from April through the end of September, as well as monitor the cost of supplying products locally.
Egyptian Prime Minister Mostafa Madbouly announced at the beginning of last July that the Automatic Pricing Committee would resume operations from the first quarter of fiscal year 2026-2027, with the aim of linking fuel prices to economic variables and global energy prices.
Hedging and lower subsidy allocations
The Egyptian government is considering activating a new hedging program against oil price fluctuations, covering about 65% of the country’s fuel imports during fiscal year 2026-2027. The proposed mechanism would cover imports of crude oil and petroleum products, as well as liquefied gas shipments, with the aim of limiting the impact of global price volatility on the import bill during the peak summer consumption period.
The 2026/2027 budget cut the target for petroleum product subsidies by about 79% to 15.8 billion Egyptian pounds, from 75 billion Egyptian pounds in the fiscal year preceding the new budget, increasing the budget’s sensitivity to movements in oil prices and the exchange rate, as well as the cost of supplying fuel locally.
Price-freeze scenario and global market trends
The scenario of keeping prices unchanged or postponing an increase depends on the trajectory of oil prices in the coming weeks, along with exchange-rate stability and an improvement in the cost of procuring petroleum products. The final decision will take into account average Brent crude prices, the cost of supplying products, the burden borne by the state and consumers’ ability to absorb any increase.
The International Energy Agency lowered its forecast for global oil demand this year, projecting a decline of about 2.5 million barrels per day, amid supply disruptions and higher fuel prices. Goldman Sachs raised its forecasts for Brent and West Texas Intermediate crude by $5 a barrel for December 2026 and 2027, expecting Brent to reach $85 a barrel and West Texas Intermediate to reach $80 in December 2026.
Egypt raised fuel prices on March 10 by between 14% and 30%, taking the price of 95-octane gasoline to 24 Egyptian pounds per liter, 92-octane gasoline to 22.25 Egyptian pounds and 80-octane gasoline to 20.75 Egyptian pounds. Diesel rose to 20.50 Egyptian pounds per liter, alongside increases in vehicle gas and liquefied petroleum gas cylinder prices.
