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Egypt mulls implications of oil price surge

View of a crude oil importing port [REUTERS/Stringer/File Photo]
View of a crude oil importing port [REUTERS/Stringer/File Photo]

The Egyptian government is currently investigating the implications of the rise in crude oil prices on the draft public budget for the next financial year 2018-19, the Minister of Finance, Amr El-Garhy, announcing yesterday.

Speaking in a press conference, El-Garhy said the surge in global oil prices had resulted from “regional factors including the US withdrawal from the Iranian nuclear agreement.”

Egypt’s financial year begins in early July and lasts until the end of June of the following year.

According to the ministry’s public budget draft, the price of a barrel of oil is estimated at $67 in the next fiscal year 2018-19, compared to $55 currently.

Crude oil prices recently surged to $80 per barrel for the first time since November 2014.

Read: Oil prices hit record high

“We [the Egyptian government] are mulling other sources of revenue,” Garhy noted.

On her part, the Egyptian Minister of Planning, Hala El-Saeed, said that the country’s economy has achieved a growth rate of 5.3 per cent in the first nine months of the current financial year.

During the financial year 2016-17, Egypt’s economy achieved a growth rate of 3.8 per cent during the first nine months. In the same year, the government reduced fuel subsidies twice as part of the government’s nation-wide reform programme.

Egypt is planning to cut fuel subsidies by 26.3 per cent in the next financial year.

Read: Egypt bank concerned as inflation rises again

Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolution, and to ease a dollar shortage that has crippled imports and hampered recovery.

In November 2016, Egypt won a $12 billion IMF loan for a three-year bailout programme that aimed to revive the struggling economy, bring down public debt and control inflation while seeking to protect the poor.