Egypt’s fuel subsidies bill is expected to reach EGP 100 billion in fiscal year (FY) 2018/19 due to the recent surge in oil prices, a government source told Enterprise.

Brent is currently trading at over $86 per barrel, $19 higher than the $67 benchmark that the government used to calculate its FY 2018/19 budget.

Calculations by Mohamed Abu Basha, head of macroanalysis at EFG Hermes, suggest that between $1 billion and $1.2 billion is added to the government’s current account deficit for every $10 increase in the price of oil.

Some analysts are now forecasting prices to rise above $100 per barrel next year.

The finance ministry is still to decide whether it will go ahead and purchase the hedging contract to insure against the rising oil prices.