Saturday,21 October, 2017
Current issue | Issue 1205, (10 - 16 July 2014)
Saturday,21 October, 2017
Issue 1205, (10 - 16 July 2014)

Ahram Weekly

Tightening controls

Strict market supervision and the provision of commodities at discount rates are key policies in combatting price hikes, writes Nesma Nowar

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eco04
Al-Ahram Weekly

In the wake of the government’s decision on Friday to raise fuel prices, several further steps have been announced to counter possible negative consequences. The hike in fuel prices will mean that transportation fares will go up, pushing commodity prices higher, for example.

Defending the decision to raise fuel prices, President Abdel-Fattah Al-Sisi said that this was necessary in order to deal with the county’s huge debt. The state would deal with any abuses practiced by some sellers, he added.

In his meeting with the editors-in-chief of Egypt’s most prominent newspapers on Sunday, Al-Sisi said that the government was studying appropriate mechanisms to control the market. He had assigned the Interior Ministry to combat “meat mafias” which allegedly sold meat at extortionate prices, he added.

Al-Sisi said that while the state had raised fuel prices, it had also raised wages. He said that beneficiaries of social security programmes had increased by 100 per cent to cover around three million families and that pensions had been raised by 10 per cent to benefit some nine million people.

This was in addition to the minimum wage, which has been raised to LE1,200, he said. The recently applied maximum wage also stood at LE42,000, he added.

In a bid to curb rising prices, Minister of Supply Khaled Hanafi said that the ministry would combat price hikes by increasing the amount of food and non-food commodities offered at state-run outlets across the country, with prices lower than 30 per cent of the market price.

In an interview on Egyptian TV earlier this week, Hanafi said that around 69 million Egyptians would have access to 20 subsidised goods listed on ration cards starting on Sunday through 25,000 access points across the country.

This month, the government introduced a new system for distributing subsidised items on ration cards under which ration-card beneficiaries will have the right to choose from a variety of products instead of a monthly quota of certain commodities.

The initial product list contains 20 commodities, among which are meat and poultry, and it is expected to include 100 goods within a few months. All items on the list are subsidised and offered at a discounted rate of 20-30 per cent.

“Chicken, for example, is available at LE14.5 compared to the non-subsidised price of LE22,” Hanafi said in the interview.

He said earlier this week that the ministry had held meetings with major producers, who had vowed not to hike prices should fuel prices be raised. He added that the ministry was carrying out supervisory campaigns to monitor prices, make sure of the availability of products, and follow up the government’s decision to raise fuel prices.

Since the decision to increase fuel prices came into effect, brawls have been taking place across the country between taxi and bus drivers and passengers after the former raised fares by nearly double for a short ride.

Bus and taxi drivers have been protesting to demand an increase in fares, while commuters have been enraged by the hikes which they have described as “unjustified.”

Interior Minister Mohamed Ibrahim has held a meeting with security officials, in which they agreed on a 10 per cent increase in transportation fares that all drivers should follow and the imposition of strict supervision on the market to prevent sellers from hiking commodity prices.  

Minister of Local Development Adel Labib has directed governors to intensify on-field inspections at microbus stations to make sure that drivers conform to the transportation tariffs set by the government.

He called for the announcement of these tariffs in all stations to prevent drivers from exploiting passengers.

Ali Abdel-Rahman, the Governor of Giza, said that there would be penalties on drivers who raised fares higher than the assigned price. The penalties would range from LE2,000 to LE10,000, he said. If these were not paid, cars would be seized.

A telephone number has been assigned to register any complaints.

In a further bid to mitigate the effects of the fuel subsidy cut, military spokesman Mohamed Samir said on Monday that the army would send buses onto the streets and that army-owned outlets would sell commodities at reduced prices.

The minister of social solidarity said on behalf of the government that it would raise the availability of public buses and increase metro lines, as well as providing an additional 1,000 buses before the end of the year.

Cabinet spokesperson Hossam Gawish announced that public transportation, including Cairo metro fares, would not be affected by the price hikes.

Professor of economics at Cairo University Farag Abdel-Fattah said that the government’s setting of guide prices for commodities was a step towards curbing inflation. He added that Al-Sisi’s speech on Tuesday had been clear about the economic problems facing Egypt.

Speaking on the eve of 10 Ramadan, when Egypt launched the 1973 War with Israel, Al-Sisi clarified the necessity of raising fuel prices and the repercussions of not taking such a decision.

“It was a strong speech that will help ease the negative effects of raising fuel prices,” Abdel-Fattah told Al-Ahram Weekly. He added that implementing a minimum wage would help people cope with the price increases.

However, some are sceptical about government measures to combat the price hikes. “How can the government be sure that each seller in each corner of the country is selling at government-set prices,” asked Doaa Adel, a housewife and the mother of two.

Adel said that previous cases had shown the government’s inability to fully control the market.

In a press conference on Saturday, Prime Minister Ibrahim Mehleb said that the decision to hike fuel prices had been taken after thorough studies, adding that the government could not achieve social justice while it was subsidising the rich at the expense of the poor.

“We are at war: we are fighting poverty and ignorance,” Mehleb said, adding that money saved from the subsidy cuts would go to the education and health sectors.

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