Egyptian energy subsidy costs increase 34% in H1 of 2017/18: Min.

CAIRO - 7 February 2018: Petroleum minister Tarek el-Molla said Wednesday that Egypt’s fuel subsidy costs increased 34 percent in the first half of fiscal year 2017/2018, in a telephone statement to Reuters.

Molla clarified that fuel subsidy costs reached LE 51 billion ($2.9 million), up from LE 38 billion.

Molla added that subsidies of fuel products have reached about LE 51 billion in the first six months of the current fiscal year, but we are still LE 4 billion below allocated amounts for fuel subsidies in the 2017/2018 budget.

Egypt allocated LE 145 billion for fuel subsidies in the budget of fiscal year 2017/2018.
In 2017, Egyptian Prime Minister Sherif Ismail said that Egypt has set a total subsidy bill of LE 330 billion in fiscal year 2017/2018.

The government spent LE 78 billion on fuel subsidies in the first nine months of fiscal year 2016/2017, up from LE 41 billion in the same period of 2015/2016.

As part of Egypt’s reform program, the government is planning to lift fuel subsidies gradually until they are entirely removed within five to 10 years.

Egypt started cutting fuel subsidies in 2014 and floated its local currency in November 2016, after which it secured a $12 billion International Monetary Fund (IMF) loan deal.

The last fuel subsidy cut came in June 2017, with the government saying that economic reform measures can no longer be delayed.

Egypt is expected to stop imports of liquefied gas by the June 2018, as production on the country’s giant Zohr gas field is set to start before the end of 2017, Molla said recently.

Zohr is the largest natural gas field in the Mediterranean. Its discovery in 2015 nearly doubled Egypt's reserves.

In January 2018, IMF issued the second review for Egypt’s economic reform program, commending the government for its taking ownership of the reform program and for “their strong track record in policy implementation since the start of the program and political support at the highest level”.