The Egyptian government is planning to double the number of crude oil hedging contracts for fiscal year (FY) 2019/20, two government officials reportedly told Enterprise.

The government is set to renew two hedging contracts with two international banks, in addition to signing five new agreements to ensure the highest degree of risk avoidance, by reviewing different offers and terms. Moreover, the government will expand hedging to include other commodities next year.

It was previously reported that the Ministry of Petroleum and Mineral Resources along with the Ministry of Finance are negotiating adjustments to the hedging deals, targeting a price of less than $70 per barrel, ranging between $64 and $68.

The aim is to avoid additional burdens on the general budget deficit, as data shows that each one-dollar increase in the global benchmark oil price translates to an additional EGP 4 billion ($222 million) in public expenditure.

The FY 2019/20 budget estimates an average price for oil at $68 a barrel.