Gulf States provided Egypt with $6 billion worth of free oil

The oil producing Gulf States have so far provided Egypt with $6 billion worth of free oil since last July, the head of Egypt’s General Petroleum Corporation revealed.

Al-Mal, a financial newspaper in Egypt, quoted Tariq Al-Mollah as saying that the aid included huge quantities of benzene, diesel, heavy fuel oil mazut, butane and crude oil.

Al-Mollah also announced that starting from this year, the three Arab Gulf States – UAE, Saudi Arabia and Kuwait – have agreed to rotate their support for Egypt on a regular basis, where the UAE will cover the local market’s needs in the first quarter of 2014 while Saudi Arabia has pledged to support the domestic market in the second quarter.

Egypt’s military backed-government already enjoys strong support from all three countries, which stepped in to provide Egypt with $12 billion worth of aid only days after the removal of President Mohamed Morsi by military coup in July 2013.

Egypt is facing the worst energy crisis in years as the government is trying to guarantee a sufficient supply of oil in the summer to avoid public anger.

Al-Mollah said that Egypt buys petroleum products worth nearly $1 billion on monthly basis from foreign companies operating in the country, of which the state pays 70 per cent.

He noted last month that Egypt’s debt to foreign oil companies rose to $5.7 billion by the end of March, as compared to $4.9 billion at the end of December.

Energy prices in Egypt are among the lowest in the world because the government spends more than a fifth of its budget on energy subsidies.

Although successive governments have called to reform the energy support system, none of them have dared to implement significant increases in prices fearing popular unrest.