A gas station attendant pumps fuel into a customer's car at a gas station in Shanghai, China November 17, 2017. REUTERS/Aly Song
CAIRO – 15 January 2020: The subsidy bill of petroleum products is expected to hit around LE 30 billion ($1.90 billion) during fiscal year 2019/2020, according to Petroleum Minister Tarek el-Molla.
In 2019/2020 budget, the estimations of petroleum subsidies were around LE 52.9 billion, compared to LE 89 billion in the prior year.
Molla said that Egypt will announce in the next few weeks the companies that will prospect for oil in the western Mediterranean.
He indicated that it is in talks with international oil companies such as Total, BP, Chevron and Exxon Mobil to explore for oil in the western Mediterranean and that this will be the first time to work in this region, through a mix between bidding and direct agreement.
"One of the countries of the East Mid gas pipeline agreement invited Egypt to participate, but we preferred to wait, " the minister pointed out.
Lately, Israel, Cyprus and Greece announced signing an agreement to extend a gas pipeline titled “East Mid” under the Mediterranean Sea to export gas to Europe.
"The invitation was not formally addressed from one of the three countries. We did not favor participation because there is no reason for this at present for us, because Egypt has good infrastructure and entering into the agreement may conflict with maximizing benefit from this structure,” Molla added.
The minister said that Egypt currently exports 1 billion cubic feet of gas per day to Europe by 10 shipments per month, to increase to 20 shipments per month after operating the liquefaction station in Damietta.
Molla said earlier that Egypt's spending on fuel subsidies dropped by about 69 percent year on year to LE 7.25 billion($451 million) in July-September. Egypt's spending on fuel subsidies stood at LE 23.25 billion in the same period of 2018.
In November 2016, the Executive Board of the IMF approved a $12 billion loan as a financial assistance for Egypt to support the Egyptian economic reform program.
Upon the board's approval in November, Egypt floated its currency, losing around 50 percent of its value as part of the economic reform program, which imposed taxes, including the value-added tax (VAT), and cut energy subsidies, all with the aim of trimming the budget deficit.