Informed sources have revealed that negotiations between the Egyptian government and the Kingdom of Saudi Arabia are faltering, when it comes to support for the Egyptian economy, because of a drop in foreign exchange reserves in KSA following a decline in oil prices.
The Saudi side will not resolve the financial aid issue with Egypt until a clearer picture emerges on fuel prices during the winter season, said the sources.
The KSA will provide petroleum aid worth US$750 million in a new agreement between Egypt and the Aramco company, according to the sources.
The negotiations, which began during Prime Minister Ismail Sharif's visit to KSA a few days ago, included proposals on petroleum aid, not unlike the renewal of the agreement that took place earlier in December and through which Egypt imported Saudi gas worth $2.7 billion, the sources added.
The decline in oil prices will influence the foreign exchange reserves of both the KSA and Gulf states, as well as reduce the chances of getting financial aid from Saudi Arabia, but this does not mean that Saudi aid will be suspended, said former CBE governor Ismail Hassan, noting that the decline in prices benefits Egypt's state budget, because Egypt imports petroleum products.
Edited translation from Al-Masry Al-Youm
