Egypt's Finance Minister criticizes fuel subsidies for their high bill paid by state treasury

CAIRO – 20 May 2024: Minister of Finance Mohamed Mait considered subsidizing fuel a "crime" as it costs the state budget LE220 billion annually (around $4.5 billion), noting that demand is increasing given the population growth.

The minister gave an example of the household sector, pointing out that 10,000 new residential units need to be powered. Further, he pointed out that the Ministry of Electricity and Renewable Energy acquired natural gas at $3 per MMBtu - regardless of the import price – to operate power plants.

A governmental source told Al Arabiyah that the daily gas consumption rose by 300 million cubic meters starting May recording 6.1 billion, including 1.1 billion that are imported, mainly from Israel.

The source noted that, in winter, the daily consumption of power plants alone hit three billion cubic meters up from 2.7 billion cubic meters, in addition to 12,000 tons of mazut.  

The Ministry of Petroleum and Mineral Resources indicated in a statement in 2023 that 57 percent of gas consumption in Egypt happens in the power generation sector, 25 percent in the industrial sector, 10 percent in petrochemicals, six percent in households, and two percent in fueling vehicles.

With regard to other types of fuel imports, their value slumped in 2023 to record $12.6 billion down from $14.3 billion. As for internal production of brute oil, it hit 28 million tons.