Egypt’s petroleum minister has said that the rise in oil prices is negatively affecting Egypt.
“The whole world is harmed by the current oil prices, we hope these prices will not last for a long period… We hope gas exports compensate for part of the cost of importing oil and petroleum products,” Tarek El-Molla told Sky News Arabia.
Oil and gas prices have surged to their highest level since 2008 following the Russian invasion of Ukraine. By Thursday Brent and West Texas Intermediate crude oil futures prices were up by over $100 per barrel.
Although oil and gas are exempt from the sanctions the West has placed on Russia, several sectors are reluctant to buy amid difficulties in shipping and making payments.
Also of concern is whether or not sanctions will be tightened further as pressure grows on the West to get even tougher on Russia.
The US has said that along with other countries it is considering a potential ban on Russian supplies.
Russia is the world’s third largest oil and liquid fuels producer and a major petroleum exporter.
At the end of February cabinet spokesman Nader Saad said that the rise in petroleum prices would put pressure on Egypt’s state budget.
Egypt has already raised fuel prices several times as it lifts subsidies to comply with the terms of an International Monetary Fund loan.
The price hikes have been tough on common citizens, one third of whom live under the poverty line.
Last week Egypt’s minister of supply and trade hinted that over 45 million citizens would no longer be eligible for bread subsidies as Russia makes up 50 per cent of the country’s wheat imports and Ukraine 30 per cent and a protracted conflict will disrupt their supply.
There are also fears that the fighting will have a detrimental effect on Egypt’s tourism industry, as Russian and Ukrainian tourists make up roughly 40 per cent of Egypt’s total tourists.
The closure of airspace and sanctions will affect the flow of tourists.
At the beginning of March the popular red sea resorts of Sharm El-Sheikh and Hurghada had already seen a 50 per cent decline in tourists from Russia and Ukraine.