Wednesday, February 6, 2019
I wrote – Yasmin Salim:
David Lepton, senior deputy director of the International Monetary Fund, said the Egyptian government is determined to recover the costs of most fuel products by mid-2019, referring to the government program to lift subsidies for its petroleum products since 2014.
He said Wednesday in a press release that the introduction of automatic fuel prices and cost recovery for most fuel products by mid-year is necessary to encourage more efficient energy use.
"This will help with revenue-increasing reforms that create financial space for high-priority spending, such as health and education."
Lipton's statement follows the announcement by the IMF on Monday that the board approved the fourth review of Egypt's economic reform program and approved the disbursement of the fifth tranche of the IMF loan to Egypt worth $ 2 billion.
Since the Egyptian implementation of the 2016 economic reform program, it plans to lift fuel subsidies by the end of June 2019. The government has increased fuel prices three times since 2016 as part of its program to reduce energy bills.
In June Minister of Petroleum and Mineral Resources, Tariq al-Mulla, said that the final deletion of oil subsidies would be the coming year.
The government decided at the beginning of January to implement the mechanism of automatic price determination on fuel, started with petrol 95, and a fixed price at the current price, which is revised every three months from March, which means that the price of 95 petrol can rise or fall or remain stable The beginning of April.
The government is expected to apply the mechanism to other petroleum products this year, Bloomberg reported.
According to a spokesperson for the fund last month, it is expected that cuts in fuel subsidies will continue in Egypt.
According to data from the Department of Petroleum and Mineral Resources, the government still subsidizes petroleum products, the cost of a liter of 95 petrol are based on the price of $ 65 per barrel of oil, the price of the dollar against the pound is 7 , £ 80 per liter and the current price is 7.75 pounds per liter. The price of petrol is LE 7.30 per liter, while the price for the sale to the consumer is LE 6.75. The costs for the production of 80 liters of petrol have exceeded LE 6.40, while the consumer price of LE 5.5 LE 7.75 per liter has been exceeded and sold to consumers for LE 5.5 Supports around 3.8 kilos.
The cost of a homemade stove is LE 135, while the local market price is EGP 50.
According to information from the Ministry of Petroleum, it imports around 40% of Egypt's total needs of petrol 92, and imports about 44% of the domestic diesel market needs and 40% of petrol consumption 80.
Official decision The government determines the price mechanism for benzene 95 .. The change starts after 3 months
How does the new 95 petrol price mechanism work?
After the automatic pricing of benzene 95 .. What lot of prices of the rest of the petroleum?