Sisi’s Government Lifts Fuel Subsidies

Article by Gigi Ibrahim

When Anwar El Sadat attempted to lift subsidies in 1977, Egypt witnessed a two-day uprising called “the bread intifada,” where the urban poor burnt cars and hotels as a sign of rejection of policies that would favor the rich over the already struggling poor.

             

Under Mubarak, policies were taken in the same direction through cutting taxes for the rich and giving tax-breaks to investors, or going to the IMF and World Bank for loans which were conditional on more neoliberal policies such as privatizing areas of the public sector. The response was a slow-burning revolution which erupted in 2011 toppling Mubarak.

Post-revolution, President Morsy, who was ousted last year, also attempted to follow in the footsteps of his predecessor; announcing a plan to lift subsidies, increase taxes, seeking IMF and World Bank loans, and privatizing more areas of the public sector. These policies were only removed a few days after Egypt witnessed one of its worst fuel shortages and power outages in 2013.

    

Now, President Abdel Fattah El-Sisi, who has already imprisoned over 41,000 people in just one year following the July 3rd military coup and killed over 3000, is implementing what the three previous presidents dared not do; lifting a third of energy subsidies that make up more than 20% in recent years of budget spending by reducing them to only 13% of budget spending in fiscal year 2014-2015.

Last night the government announced that the implementation will take effect after midnight on July 5th 2014. The prices of  the most commonly used fuel “Solar” is to rise 64% from 1.10 EGP to 1.80 EGP. This increase will affect prices of all commodities and transportation since it is used by trucks, heavy loaders, agricultural machinery, and most importantly microbuses, which is the most common mean of transportation in Egypt. 80-octane gas is to also increase 78%, which will affect those still using old cars, mainly elderly and those still using black and white cabs.

Natural gas is to increase from .40 to 1.10 EGP which is an increase of 175%, a rise which is sure to affect white taxis, some of whom went on strike this morning, only hours after the increase was put into effect, in front of the presidential palace. (Photos via @PRullezz)

      

Petrol 92-octane is to rise from 1.85 EGP to 2.60 EGP, which is a difference of 40%, this is the fuel used by most people owning average cars, mainly the middle class and upper middle class. On the other hand, 95-octane petrol will rise from 5.85 EGP to 6.25, only a 7% increase, reflecting the fact it was not already subsided. The 95-octane gas is consumed by high-end cars owned by drivers from the highest class of society.

What is crystal clear is that this is the only route Sisi can take in order to tackle the economic crisis without sacrificing any of the interests of the ruling. But as history has shown us, austerity and repression never result in “stability” or a prosperous society. With wages untouched and the demand for 1500 EGP minimum wage still to be discussed, the Egyptian struggling working class will be pushed to fight back. One can only imagine how an average family will be able to live under such conditions where repression and the cost of living are rising without any reform in workers rights, human rights, or changes to an economic infrastructure which is currently only serving the rich.

Prices of electricity are also set to go up. The Minister of Electricity announced last Thursday that prices of electricity will double within five years, but the rise will be introduced gradually. Egyptians have lately witnessed a spike on their electric bills while experiencing on-and-off power outages very much reminiscent of the Morsy era. However, these increases do not include the electric power supplies to the factories yet.

The anticipation is building to see whether those who supported Sisi as president to “get rid of terrorism” or who dream that Sisi is capable of bringing “economic prosperity, stability and growth,” will object to those increases for which they removed Morsy just a year ago? It is an illusion that they will revolt or protest against the tyrant, who kept them under curfew for 5 months, cut electricity supplies, killed thousands, imprisoned tens of thousands, and is now raising all prices of living without offering any concession in return while ruling with an iron fist. However, it is realistic to assume that at least some will be disillusioned and come one step closer to the road of revolution.

Amidst censored media, massive repression, and under the rule of a military state, worsening economic and political conditions don’t always result in an uprising. Even if this did happen in Egypt in the past, it doesn’t mean it will happen again automatically. With Mubarak it took 30 years, decades of struggle and resistance to achieve the Jan 25th revolution. With the defeat of the first wave of the Jan 25th revolution, another wave will only depend on the left’s capability to agitate and organize the disillusioned masses into a force capable of providing a viable alternative to power.

Sisi will continue with his counter-revolutionary mandate whether economically or politically and we, the revolutionaries, will continue to fight, build and organize for bread, freedom, and social justice. One day I believe we will prevail.