Cairo – Mubasher: Energy subsidies in the next year's budget will rise to EGP 200 billion due to the flotation of the Egyptian pound, the country's finance minister has said.
The weakening of the EGP will nearly double the electricity and fuel bill to reach around EGP 200 billion in fiscal year 2017/2018, compared to the current estimate of EGP 135 billion for the current fiscal year, Amr El Garhy said on a CBC show.
Subsidies for petroleum products in the new budget will amount to approximately EGP 140 billion to EGP 150 billion, whereas electricity subsidies will likely reach EGP 50 billion, the finance minister added.
On Sunday, petroleum minister Tarek El Molla said that the price per barrel of oil in the 2017/2018 budget will be estimated at $55-$60 a barrel.
Egypt's Ministry of Finance (MoF) estimated that petroleum subsidies will reach EGP 35 billion in the current fiscal year; however, following the government's flotation of the EGP on 3 November 2016, subsidies increased as the US dollar price surged from EGP 8.88 to around EGP 16 in the new budget.
Egypt took the decision to float its local currency as part of its talks with the International Monetary Fund (IMF) for a $12 billion loan.
