The Egyptian government’s push to increase petroleum prices may increase the costs of building materials says Arabian Group Chairman Tarek Shoukry. The government has already reduced subsidies, a move that has led to the price rise of steel and cement, among other building materials. The price of cement rose by 40% in one year.
According to Shoukry, market demand for building materials will also increase once the UAE’s Arabtec begins construction of the 1 million units in a project in cooperation with the Armed Forces. Shoukry has said that this increase in demand will push the price of building materials to a final 30% increase.
CEO of the Egyptian Federation for Construction Mr. Hassan Abdelazi has also expressed concern saying that the increased price of petroleum products is likely to increase transport costs and increase final real estate prices.
Shoukry has also said that the expected increases could last for seven years. The delay in lowering these prices was due to the fact that there is no anticipated fall in raw material prices. Concerns have been raised that energy subsidies could eat up to 20% of public expenditure.