Egypt has spent a total of EGP 23.8 billion on the subsidies of different petroleum products during the first quarter (Q1) of fiscal year (FY) 2017/2018, announced Egyptian Minister of Petroleum and Mineral Resources, Tarek El Molla, Egypt Oil & Gas reports.

The government had initially allocated EGP 27.7 billion for the quarter, rendering the total saved amount EGP 4 billion.

The difference in budget due the the shift in Brent prices. The budget was calculated on an average Brent price of $52 per barrel, with the exchange rate set at EGP 17.7 per $1. However, El Molla noted that the cost of producing diesel is estimated at EGP 5.7 per liter, while it is sold at EGP 3.65 per liter. Similarly, Benzene 80-octane’s production cost reached EGP 5.7 per liter and Benzene 92-octane cost of production is EGP 6.4 per liter, while the selling prices are set at EGP 3.65 per liter and EGP 5 per liter, respectively.

Furthermore, the production cost of one butane cylinder is around EGP 124, while it is only sold for EGP 30, stressed El Molla. Additionally, producing mazut costs EGP 4300 per ton, and it is sold for cement factories EGP 3500 per ton, and for other factories for only EGP 2100 per ton.

The Egyptian oil and gas sector is playing a major role in supporting the country’s development plans through providing petroleum products to all the economic sectors, whether from national refineries or through importing some of the petroleum products for global prices, EL Molla highlighted.