Cairo – Mubasher: Subsidies on oil products increased by EGP 34.85 billion, while subsidies on electricity went up by EGP 50 billion in the budget of fiscal year 2017/2018.
Subsidies on oil products may exceed EGP 145 billion in FY17/18, while those on electricity may reach EGP 80 billion, Egypt’s prime minister Sherif Ismail said on Monday.
Egypt aims to decrease its budget deficit in FY17/18 by 9% of the gross domestic product (GDP), compared to between 10.5% and 10.8% in the current fiscal year.
In the FY17/18 draft budget, which was submitted to the Egyptian parliament, subsidies on oil products reached EGP 110.148 billion, compared to EGP 101.272 billion expected in FY16/17.
On a year-on-year basis, electricity subsidies reached EGP 30 billion, compared to EGP 35.071 billion.
The Egyptian Ministry of Finance (MOF) had estimated oil products subsidies to reach EGP 35 billion during 2017; however, the flotation of the Egyptian pound on 3 November 2016 contributed to an increase in the cost of subsidies, amid a surge in the US dollar exchange rate from EGP 8.88 to EGP 16 in the new budget.
Egypt plans to reduce oil imports to a third by 2019 due to oil production and refining projects, according to the minister of petroleum and mineral resources, Tarek El-Molla.
