CAIRO -- Egypt's prime minister on Saturday defended his government's decision to introduce a steep rise in fuel prices, saying energy subsidies in the past decade have cost the treasury nearly $100 billion that could have been used to bolster essential services.
The price increases of up to 80 percent went into force early Saturday, after the government promised to cut subsidies that eat up nearly a quarter of the state budget. They also come after an increase in electricity prices that went into effect earlier this month.
Prime Minister Ibrahim Mahlab said it would be a "crime" if his government did start lifting subsidies. He argued that 26.3 percent of Egypt's 86 million people live in poverty and that overall unemployment stands at 13.6 percent, topping 50 percent for Egyptians ages 20 to 30.
"There will have to be political, social and economic reforms," Mahlab said. "Debts are mounting, and the question we must ask ourselves is whether we want to leave this legacy for future generations."
Mahlab said the partial lifting of energy subsidies would free about $7 billion for education, health care, pensions and raising wages.
Newly elected President Abdel-Fattah el-Sissi asked every Egyptian to be ready to sacrifice to help the country's battered economy after three years of turmoil.
The former military chief asked the government to amend Egypt's $115 billion budget -- the largest in the country's history -- to reduce its deficit from 12 percent to 10 percent.
Prices for 80 octane gas, common for the old cars filling Egyptian streets, jumped 78 percent; diesel, used in public transport and trucks, jumped 40 percent.
In some areas, this spurred long lines of frustrated motorists at gas stations.
Some drivers of Egypt's popular microbuses had raised their fares before the government announced the exact increases. Mahlab warned that authorities would intervene to make sure fare increases are limited to about 10 percent. Taxi meters also will be changed to allow for higher fares, he added.
In Suez, microbus and taxi drivers refused passengers until the government announces a detailed new fare structure, forcing some to walk to work.
While in line Saturday at a Cairo gas station, taxi driver and father of five Ebeid Ibrahim directed his frustration at the president.
"When el-Sissi came to office, he said he did not have a magical wand to make people's lives better. We do not want anything from anybody, but at least the status quo should have been left as it is. Where am I supposed to get money from?" said Ibrahim.
Near him, Abdullah Ibrahim, 36, and father of three, said,
"If they ask us to bear extreme measures, they have to be reasonable. The rise will specifically affect the poor."
A Section on 07/06/2014