Sources at the Petroleum Ministry revealed to Egypt Oil & Gas that the current global price of oil reaching $48 a barrel will save the state nearly EGP 30b during the current fiscal year (FY) alone, as the government has set $75 as the average price of a barrel of oil in the current budget, in anticipation of any sudden changes in international oil prices during the year.
The continued decline in global oil prices in the coming period will lead to a lower annual import bill for petroleum products. This in turn eases the pressure on energy subsidies, currently worth EGP 96b, which will help Egypt rationalize energy subsidies, reaching EGP 61b in 5 years time.
He insisted that that the continued reduction of world oil prices is extremely beneficial for the national economy of Egypt. He added that the Egyptian government should conclude as many new agreements as possible with fuel suppliers to stock up for its strategic reserve of petroleum products to be used in times of crisis for the local market.