Government source stated to Egypt Oil&Gas that the Egyptian Cabinet is in talks over the amounts allocated for fuel subsidies in the new budget of fiscal year 2017/2018. The Ministry of Finance and the Ministry of Petroleum are in discussions over the budget as the Ministry of Finance suggested allocating EGP 80b for subsiding energy while the Ministry of Petroleum argued that the amounts allocated should not be less than EGP 100b.
The Ministry of Petroleum explained that the average exchange rate of USD is EGP 16. In addition, oil barrel prices had reached $62 per barrel. The source pointed out that this will lead the Egyptian government to increase fuel prices especially as Egypt is losing EGP 6b/m due to the gap between the actual cost and the selling prices.
The government receives only EGP 60b from selling petroleum products in local market, although the government imports around 50% of the petroleum products in order to fill the gap between supply and demand.