Egypt Cancels Fuel Hedging Contracts

Egypt Cancels Fuel Hedging Contracts

The Ministry of Finance has canceled plans to purchase fuel hedging contracts from international financial institutions, a government source told Enterprise.

The ministry was close to finalizing contracts with two banks, before crude oil prices dipped below the $67 benchmark price used to calculate the country’s 2018/19 budget.

The government first announced it was looking to obtain a hedging mechanism in July, as Brent prices rose above the government’s projections.

However prices have rapidly declined since the beginning of October, plummeting almost $30 to lows of $58 per barrel at the end of November.

Brent is now trading below $67, eliminating the need for the government to purchase hedging products, the source said.

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Sarah Samir 3515 Posts

Sarah has been writing in the oil and gas field for 8 years. She has a Bachelor Degree in English Literature. She has three years of experience in the banking sector.

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