October 24, 2016 / 2:41 PM / 3 years ago

Egypt's profit margin guidance will not be legally binding: minister

An Egyptian worker makes traditional sweets, "Kahk", as part of the celebration of the Eid al-Fitr festival, at a bakery in Cairo July 27, 2014. Picture taken July 27, 2014. REUTERS/Mohamed Abd El Ghany

CAIRO (Reuters) - A committee established by the Egyptian government to determine how much profit should be made from the sale of essential goods will offer guidance only and firms will not be legally required to comply, Trade and Industry Minister Tarek Kabil said.

Egypt formed a cabinet-level committee this month tasked with devising mechanisms to set the appropriate profit margins on the sales of basic goods.

Struggling with double-digit inflation and sugar shortages, ordinary Egyptians have urged the government to stabilize prices of essential goods, but the announcement raised fears among investors that the government was planning to introduce price caps.

“The one thing I assure you is there is no obligation for setting the price. We will not be pushing companies to sell at a certain price. It is just a direction, that is all. There is no legal requirement,” Kabil told Reuters.

Prime Minister Sherif Ismail, who will chair the committee that will include representatives from several ministers as well as intelligence and state watchdogs, has already said that the committee would focus on profit margins not prices.

Kabil said he had no details on which goods the guidelines might apply to or when they would be introduced.

Reporting by Lin Noueihed; Editing by Toby Chopra

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