Energy subsidy expected to increase up to LE140 billion by end of fiscal year

Energy subsidy expected to increase up to LE140 billion by end of fiscal year

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Wed, 05/02/2014 - 17:17
Petroleum Minister Sherif Ismail said petroleum products subsidy is expected to increase by 10 percent by end of the current fiscal year to reach LE140 billion, compared to LE130 billion by the meantime.
 
Egypt consumes petroleum products of E350 billion annually, the minister told Al-Masry Al-Youm. Egyptian petroleum sector offers petroleum materials to the local market at LE200 billion, while it provides revenues of only LE70 billion. He stressed that such situation is hard for the country to bear.
 
“If Egypt wants to achieve huge growth rates in the near future, we should take serious measures to rationalize this subsidy. If the situation continues this way, Egyptian citizens, as well as the services rendered for them, especially in vital sectors like health and education, will be negatively affected,” he said.
 
Rationalizing energy subsidies will save money in the state budget and will then be directed to improving infrastructure, education and health projects.
 
Subsidies will increase in the short term as a result of the expected increase in investment volume and projects that could lead to increase in amounts of petroleum products required for operation.
 
“There is a gas shortage problem that has been ongoing since previous governments. However, the petroleum sector is working on new projects and excavations that could increase the gas by end of the year from 10-15 percent, compared to last year,” he said.
 
A project of distributing diesel oil and gasoline cards among citizens is ongoing. Data is being completed by Interior Ministry, Ismail said. 1.5 out of 4.5 million cards were printed. The rest is expected to be finished within the coming two months before end of the current fiscal year 2013-2014.
 
Egypt needs around 37,000 tons of diesel oil daily, 18,000 tons of gasoline, 14,000 tons of butane gas, 100 million square feet of gas and 35,000 tons of fuel oil.
 
 
Edited translation from Al-Masry Al-Youm