Egypt: Transitioning Away from Subsidizing Fossil Fuels

In 2014, Egypt implemented wide-ranging fossil fuel subsidy reforms to address a budget deficit and economic instability. The government raised prices for gasoline (78%), diesel (64%), and kerosene (64%), while introducing social protections such as expanded food subsidies, increased public-sector minimum wages, and expanded social security pensions. While the reforms reduced energy subsidy spending by 29% in the first quarter of the 2014-2015 fiscal year and were supported by a broad political consensus, the document notes that compensatory measures did not fully offset costs for the poorest households due to a lack of targeted delivery mechanisms like a unified household registry.

• Egypt's 2014 subsidy reforms targeted a significant fiscal burden; in 2013, fuel subsidies cost $21 billion, representing 22% of the national budget or 6% of GDP. These subsidies were regressive, with the wealthiest 20% of households receiving 46% of the benefits, while the poorest 20% received only 9%.
• The government implemented several social protection measures to offset the impact of price hikes, including extending the food subsidy program to 20 new products in June 2014, increasing the public-sector minimum wage via stimulus packages, and expanding social security pensions to cover 2.3 million families in the 2014-2015 budget.
• The reforms achieved immediate fiscal relief, reducing energy subsidy spending by 29% (to $3.1 billion) in the first quarter of the 2014-2015 fiscal year. This was further aided by low global oil prices.
• A primary challenge was the inability to precisely target support to the poorest citizens due to the absence of a unified household registry and the lack of an electronic smart card system, making economy-wide food subsidies less cost-effective than direct cash transfers.

APA

World Resources Institute (2021). Egypt: Transitioning Away from Subsidizing Fossil Fuels. https://www.wri.org/snapshots/egypt-transitioning-away-subsidizing-fossil-fuels

Chicago

World Resources Institute. Egypt: Transitioning Away from Subsidizing Fossil Fuels. 2021. https://www.wri.org/snapshots/egypt-transitioning-away-subsidizing-fossil-fuels.

Wikipedia

{{cite report |author=World Resources Institute |title=Egypt: Transitioning Away from Subsidizing Fossil Fuels |date=1 April 2021 |url=https://www.wri.org/snapshots/egypt-transitioning-away-subsidizing-fossil-fuels |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitute2021egypt, author = {{World Resources Institute}}, title = {{Egypt: Transitioning Away from Subsidizing Fossil Fuels}}, institution = {World Resources Institute}, year = {2021}, month = apr, url = {https://www.wri.org/snapshots/egypt-transitioning-away-subsidizing-fossil-fuels}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }