Economists said, “The rise in fuel prices will fuel inflation rates, and will contribute to increasing the prices of goods for citizens, by transmitting this increase in production and transportation costs to the final consumer.”
Experts expected “inflation rates to rise to a range of 28% in the coming months, up from 26.4% in September, in contrast to the expectations of the Central Bank of Egypt, which said on Thursday that expectations indicate stability in inflation at its current levels until the fourth quarter of 2024, but He pointed to “some upside risks” such as continued regional tensions, rising global commodity prices, especially energy, and the possibility that fiscal consolidation measures will have an impact beyond expectations.
Despite the increase in the price of diesel, the primary driver for vehicles transporting food commodities, by more than 17%, two senior officials in the Federation of Chambers of Commerce expected that the increase in the prices of food commodities would be very limited, and not exceed 3%.
Mustafa Badra, an economic expert, said, “Increasing fuel prices will contribute to an increase in inflation rates, and thus an increase in market prices, unless the government intervenes and controls the volume of supply of goods so that it can curb inflation.”
The economist explained that “the rise in fuel prices, including the fuel used in manufacturing, transportation and distribution, will lead to an almost doubling of commodity prices,” adding that “this increase in costs will inevitably be passed on to the final consumer, and is a direct result of the increase in production costs.”
For his part, Mustafa Shafie, head of the research department at Al Arabiya Online, said, “Inflation rates will witness an upward trend in the readings of October and November, especially after the increases that occurred in fuel prices, and therefore we expect annual inflation to rise to reach the 27.5% barrier.” And 28% in the coming months.”
Shafie expected that the Central Bank would tend to “stabilize interest rates during the upcoming meetings, with the possibility of raising interest rates between 100 and 150 basis points.”
Mohamed Attia Al-Fayoumi, Treasurer of the General Union of Chambers and President of the Qalyubia Chamber of Commerce, said, “The increase in the prices of food commodities will be slight and very limited, because the increase in the price of a liter of diesel is divided by the total weight of the goods loaded on the transport vehicle, so it does not exceed the share of the kilo.” Each increase is only a few limited pennies.”
He said, “The rise in diesel prices by 17.4% increases commodity prices by a rate ranging between 2 and 3%, calling on the Egyptian government to tighten control over merchants and importers at this stage, because some merchants are taking advantage of the situation and will raise commodity prices by a percentage that exceeds the increase in the price of fuel.”
He noted that “the increase in the prices of goods that use fuel as a raw material in production will be significant, such as paper products and printing.”
Regarding the prices of vegetables and fruits, Hatem Naguib, Vice President of the Vegetables and Fruits Division at the Cairo Chamber of Commerce, said, “The increase in diesel prices by 17.4% will add 25 piasters more per kilo from inside Cairo, considering that the cost is divided by 2 tons of goods loaded on the transport vehicle.” The increase should not exceed a quarter of a pound per kilo.”
This increase will be greater in the case of transporting goods from Cairo to neighboring governorates, as a result of the increase in fuel consumption, according to Naguib, who expected that “in all cases, the increase in commodity prices will not exceed 2 or 3%.”
The government raised fuel prices on Friday, for the third time during the current year 2024, by a rate of 17.4%, explaining that raising fuel prices “comes within the framework of keenness to provide petroleum products, adjust market performance in accordance with established pricing mechanisms, and reduce the gap between the selling prices of petroleum products and their costs.” High productivity and imports.”
The previous day, the Central Bank fixed interest rates based on the stability of inflation rates on an annual basis, and adjusted its expectations for the start of a decline in the inflation rate to be in the first quarter of next year, 2025. Its previous expectation, announced last May, was that inflation would begin to decline significantly during the second half of the year. Next.
Source: RT + Al Shorouk
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