Egypt to Hedge Oil Prices in FY 2019/20

Egypt to Hedge Oil Prices in FY 2019/20

Egypt plans to apply an oil hedging mechanism in fiscal year (FY) 2019/20 that starts in July after its efforts to lock-in oil prices in the FY 2018/19, according to Finance Minister Mohamed Maait, Bloomberg reported.

“We hedged against oil price increase during the current fiscal year,” Maait said in an interview, noting that Egypt has finished a program that was widely rumored in the oil market earlier this month. “We will hedge in the new fiscal year,” he added.

The Ministry of Petroleum and Mineral Resources along with the Ministry of Finance were adjusting the hedging mechanism for fiscal year (FY) 2019/20 amid oil price fluctuations. Oil prices fell below the $70 per barrel level during FY 2018/2019, the set price in the Egyptian government hedging agreement with JPMorgan Chase and Citibank, which ended on June 30.

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