The ministry said that global markets for raw oilseeds had recently seen a "notable increase" and that a committee would be formed to review prices every three months.
Egypt, which imports 95% of its vegetable oil needs through state buyer GASC, offers buyers a blend of soybean and sunflower oil covered by its extensive subsidy programme, which also includes staples such as bread and rice.
"Prices should soften a bit later on this year. Not much of a downside though and that's why they decided to go ahead and raise prices instead of waiting for the sharp decrease that never came," one trade source said.
A one-litre bottle of blended soybean and sunflower oil available to Egyptians who qualify for subsidies previously cost 17 pounds per bottle. The ministry also said there would be a new 800 ml bottle available for 17 pounds.
The new prices would allow the government to break even if not make a marginal profit, traders said. One trader said the pricing change could make private sector products more competitive.
"Bottles of pure sunflower oil or soybean oil are sold at regular supermarkets for not much higher than 21 pounds, which means consumers can opt to by them unsubsidised and use their credit to purchase other goods," an Egyptian trader said.
More than 60 million of Egypt's 100 million population qualify for the food subsidy programme and the government has allocated 87.8 billion pounds for commodities subsidies in the financial year beginning July 1.
Egypt's strategic supplies of vegetable oils were sufficient to last five months, the supply ministry said. At its last tender for vegetable oils, GASC bought 10,000 tonnes of sunflower oil.
($1 = 15.6300 Egyptian pounds)
(Reporting by Nadine Awadalla; Writing by Aidan Lewis; Editing by Kirsten Donovan and Jane Merriman)
By Nadine Awadalla