Egypt is in a strong position to raise gas price to all importers, Minister of Petroleum, Abdallah Ghorab stated in a press conference.
Ghurab revealed that Egypt is negotiating with Jordan and Israel to raise export prices. Currently, they receive a generous below-market discount on gas from Egypt, which Egyptians resent, particularly with regard to Israel.
“Public opinion and pressure supports the difficult negotiations we are leading now with Israel” stated Ghorab. The minister declined, however, to unveil the current price of Egyptian exported gas.
He did promise to bow to public opinion by changing the price of gas and announcing shortly an index price. “This will affect our contracts with other importers,” he nailed the point.
Egypt exports four percent of their gas to Israel, according to figures released in the press conference by the head of petrol authority, who was appointed ten days ago.
Regarding local subsidies, the minister of petroleum vows to keep the price of gas barrels untouched at LE3, but says, grudgingly “…I find it strange that consumers pay LE15 a barrel to a private trader but refuse to allow the government to raise its original price by [even] one pound.”
Ghorab calculates that the energy subsidy bill, which is currently budgeted at LE72bn will rise by LE10bn to LE82bn, due to a hike in international oil prices.
Egypt produces 700 thousand barrels a day and 6.3m cubic meters of natural gas. “If all of this was sold at market price the government would be rich,” he says. Nevertheless, subsidies will remain untouched “because this is a sovereign decision,” rather than economic one.
Energy subsidies in Egypt are criticized as it benefits the rich more than the poor.