Egypt’s government drastically raised fuel prices late Friday to tackle a bloated subsidy system, in a potentially unpopular move that could present newly elected President Abdel Fattah al-Sisi with his first serious challenge

Egypt's government drastically raised fuel prices late Friday to tackle a bloated subsidy system, in a potentially unpopular move that could present newly elected President Abdel Fattah al-Sisi with his first serious challenge, according to AFP.
  
With an economy battered by three years of unrest, successive governments had said that the subsidies which allow Egyptians to buy gasoline at some of the world's cheapest prices must be lifted. But the authorities had shied away from implementing the cuts fearing a public backlash, something that Sisi, elected in May, has said would not prevent him from slashing state spending.
  
The government decree raised the price of 92 octane gasoline, which sold at 1.85 pounds ($0.36) a litre, to 2.6 pounds, and 80 octane gas from 0.9 pounds to 1.6 pounds a litre, the official MENA news agency reported. The price of diesel was raised from 1.1 pounds to 1.8 per litre, the agency reported.
  
The price increase will take effect at midnight Friday, the state-owned Al-Ahram newspaper reported on its website.
  
The state spends more than 30 percent of its budget on fuel and food subsidies, in a country were nearly 40 percent of the population -- some 34 million people -- hover around the poverty line.
  
Interim premier Ibrahim Mahlab has said that subsidies on oil cost the exchequer $22 billion, against an annual education and health budget of $9.8 billion.