(Bloomberg) -- Egypt needs to increase the price of subsidized bread to reflect its true cost to the government, Prime Minister Mostafa Madbouly said. 

Madbouly, speaking during a tour of an Alexandria factory, also said the government will pay between 20%-25% of the arrears to foreign oil companies in the coming week. The remainder will be paid off gradually, he said.

Egyptian officials, while looking to cut costs, have been reluctant to raise the price of subsidized bread on which a majority of the population of over 105 million depends as part of a broader commodities ration program. 

Madbouly said the country produces 100 billion loaves of subsidized bread per year, costing the state between 110 billion-115 billion Egyptian pounds ($2.3 billion-$2.4 billion). What the government gets from the sale of the bread, however, is only 5 billion pounds.

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