In Tumultuous Egypt, Fuel Subsidy Reform Is Inevitable
Egypt remains mired in crisis since the military-backed ouster of President Mohammed Mursi July 3. The ongoing political instability will further delay attempts to address one of the country’s thorniest economic issues: long-standing fuel subsidies that account for a fifth of state spending, a reported $17.4 billion over the past year.
Those subsidies played a role in the recent blackouts and fuel shortages that have paralyzed the streets of Cairo. While fuel subsidies have been important to maintaining socio-economic stability in Egypt for years, keeping gas prices under $2 per gallon, they also have created waste, a ballooning debt, and the smuggling of cheap fuel to sell at profit. (See related interactive: “Fossil Fuel Burden on State Coffers.”) Part