Egypt will continue to cut energy subsidies in order to decrease government expenditure, petroleum minister Tarek El Molla said during the Eleventh Arab Energy Conference currently being held in Marrakesh , Al Ahram reported.

The minister said that the high cost of energy subsidies puts pressure on the country’s finances, and uses money which can be used to improve social services.

El Molla’s comments came amid an ongoing surge in oil prices that is threatening the government’s deficit reduction targets, and placing additional strain on the public purse.

Brent rose above $85 per barrel on October 3, a high not seen since November 2017. This is $18 higher than the $67 benchmark used by the government to calculate its 2018/19 fiscal budget.

Egypt has been decreasing energy subsidies and implementing other fiscal measures as part of an ongoing economic program to obtain a $12 billion loan from the International Monetary Fund (IMF) in 2016.