Petroleum Minister: Mazut subsidies to end in three years

Petroleum Minister: Mazut subsidies to end in three years

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Wed, 20/02/2013 - 22:05

Petroleum and Mineral Resources Minister Osama Kamal said Wednesday that the price of mazut, a fuel commonly used for industrial purposes, will continue to rise after a series of government imposed fuel hikes were announced Tuesday. The government aims to sell the fuel at market price within three years.

According to industry sources, some of the price increases to fuels like mazut and locally produced natural gas are 50 percent higher than previous levels, triggering protests by factory owners affected by the increase.

Several hundred people employed in the brick manufacturing industry — one of the sectors that uses mazut — blocked roads in Cairo and Minya, south of the capital, on Tuesday to protest the price rises, an unnamed security source told Reuters.

Kamal also said the fuel's market price will depend on global developments, so he is unable to speculate as to next year's prices.

The mazut price increases will mainly affect cement and brick factories, the fuel's largest consumers. The 50 percent price increase for industrial users excludes bakeries, food industries and electricity companies.

Tuesday's government announcement, released in the official government newsletter, gave no comparative figure or timeframe for when the new prices would come into effect.

Medhat Youssef, the former vice chairman of the General Petroleum Authority, said the government was unlikely to charge companies for the more expensive fuel retroactively, since it would be illogical.

“How will they track down concluded sales before that date?” he asked.

Edited translation from Al-Masry Al-Youm