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Egypt discusses free oil shipment with Kuwait amid calls to lift subsidies

February 10, 2014 at 10:44 am

The Egyptian General Petroleum Corporation (EGPC) has said that it is currently negotiating with Kuwait over a free oil shipment in December, estimated to be around two million barrels, as part of a gift offered in the wake of the military coup on 3 July.

An EGPC senior official told Anadolu news agency that Egypt had already received two free shipments of crude oil from Kuwait between July and September. The two shipments were estimated to contain around four million barrels, priced at $480 million.

Immediately after the coup in July, Kuwait announced a $4 billion gift to Egypt. Half of the gift was allocated as a non-refundable deposit in the Egyptian Central Bank and the other half was to be given as petroleum products.

The company official explained: “We are working on putting a timetable for importing the needed petroleum products from Kuwait.”

Meanwhile, former Egyptian Petrol and Mineral Resources Minister Abdullah Ghorab remarked that the Arab state’s gift to Egypt helped to reduce the great financial burden that offering subsidised petroleum incurs.

EPGC imports $1.3 billion petroleum products a month. EPGC resources pay part of the import costs, and the ministry of finance covers the remainder. EPGC then offers subsidised fuel to Egyptians at only 20 per cent of the global price.

Ghorab said: “There must be a clear vision to deal with the issue of subsidising petroleum products, which depletes the state’s resources without there being a need.”

Previously, the leader of the military coup, General Abdul-Fattah Al-Sisi, said in a leaked recording that he was planning to lift the subsidies on basic needs, including petroleum.

Monthly demand for petroleum products equals 450,000 tons of diesel fuel, 500,000 tons of gasoline and 300,000 tons of Kerosene.