* Rises for gasoline, diesel, heavy oil mazut, gas feedstock
* Government expects inflation in double digits
* Curbing subsidies first hurdle for new president
By Mirette Magdy
CAIRO, July 2 Egypt's Planning Minister Ashraf
al-Arabi said on Wednesday the government was about to raise
prices on most petroleum products, a move he said would push
inflation into double digits.
"We will raise energy prices within days," he told Aswat
Masriya, a news website sponsored by the Thomson Reuters
He said the increase would apply to gasoline, diesel, heavy
fuel oil mazut and gas feedstock for factories but not cooking
gas. He said electricity prices would go up for the heaviest
Arabi did not specify the size of the increases but said
they would produce a "shock" in the price of other goods and
"The government expects to be in the double
digits," he said. Urban consumer prices are up 8.2 percent
year-on-year, according to government figures published in May.
Raising energy prices by cutting subsidies could be the
first test for new President Abdel Fattah al-Sisi, who must
improve state finances and revive an economy battered by more
than three years of political turmoil.
Sisi, who ousted elected President Mohamed Mursi last July
following mass protests against his rule, took office last
month. He has called on Egyptians to tighten their belts and
make sacrifices to get the country back on its feet.
Prime Minister Ibrahim Mehleb said on Wednesday a date had
not been set for raising energy prices but could be announced
"very soon", in comments reported by state news agency MENA.
Egypt's cash-strapped government spent 144 billion Egyptian
pounds ($20 billion), or around a fifth of its budget, on energy
subsidies in the fiscal year that ended on June 30.
Artificially low prices - among the lowest in the world -
provide little incentive to curb consumption, despite a fuel
supply crisis in the most populous Arab state that causes daily
Egypt announced this week 40 billion pounds' worth of cuts
in energy subsidies in its budget for the 2014/15 fiscal year
which began on Tuesday.
Finance Minister Hany Dimian said at a news conference about
the new budget on Monday that there was no timeline for
petroleum price increases.
The subsidies, in place for decades, drain foreign currency
that could instead be used to pay off debts to foreign energy
companies and improve payment terms to encourage investment.
Cuts could prove unpopular with many ordinary Egyptians
struggling to make ends meet, particularly amid the summer heat
and during the month of Ramadan, when observant Muslims fast
from dawn until dusk.
The availability of inexpensive fuel, along with food, is a
powderkeg issue in Egypt. A cut in bread subsidies in 1977
ignited riots against President Anwar Sadat. People power has
helped topple two presidents since 2011.
Successive governments have called for subsidy reform, but
none have dared impose big price rises for fear of unrest.
($1 = 7.1501 Egyptian Pounds)
(Writing by Stephen Kalin; Editing by Andrew Roche)