As Egypt’s famous mega gas field Zohr nears its official production date, many speculations revolve around how soon it will begin to impact the local market behavior, and more importantly, the national import bill.
Elimination of energy subsidies have been the focus of the Egyptian government since 2014, resulting in gradual, yet significant, increases in prices throughout the local market. As a core staple in Egyptian households, butane or liquefied petroleum gas (LPG) cylinders were often exempt from the different rounds of price escalations; however, encouraged by the reform measures in line with the $12b IMF loan program, in November 2016, the official price of LPG cylinders jumped from EGP 12.5 to EGP 15 per cylinder.
The prices of petroleum products have recently changed after the latest government amendment to the energy subsidies in June of this year, increasing fuel prices by at least 50%, according to the ministry of electricity statements. The government’s aim by the increase is to reduce the total amount of petroleum products subsidies to EGP 110 billion in fiscal year (FY) 2017/2018, according to an earlier statement by Tarek El Molla, the Minister of Petroleum.
Amidst the economic reform ongoing in Egypt, the oil and gas industry has played an incredible role in designing prospects to rebalance the government’s budget. In 2017, the hydrocarbon-rich country has obtained important achievements in the petroleum sector, and upstream activities were marked by several oil and gas discoveries and acquisitions.
