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Saturday, 23 September 2017

No firm date for next fuel-subsidy cut, but process is unstoppable: Egypt's petroleum minister

Tarek El-Molla told journalists on Wednesday that the scrapping fuel subsidies has already been agreed and any delay would place a 'heavy burden' on the state budget

Ahram Online , Wednesday 28 Jun 2017
Fuel
A female employee fills the tank of a car at a petrol station in Cairo, Egypt, February 24, 2016 (File photo: Reuters)
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Egypt's Petroleum Minister Tarek El-Molla said on Wednesday that the government has not set a date for the next rise in fuel prices but the phasing out of fuel subsidies is inevitable and should not be delayed, state-run news agency MENA reported.

Following a meeting with Prime Minister Sherif Ismail, Molla told journalists that the government's five-year programme to scrap fuel subsidies was already approved by parliament and so there is no reason to delay implementation.

The minister said any delay in the decision to end fuel subsidies would place a "heavy burden" on the state budget.

Fuel subsidy cuts were part of an economic and fiscal reform package agreed in 2014 that aimed to ease the growing budget deficit.

A five-year plan was created to gradually scrap fuel subsidies, a policy that sparked fierce debate in political circles.

In November 2016, following the decision to float the Egyptian pound, the government raised fuel prices.

With the start of the new fiscal year on 1 July, further cuts in fuel subsidies are expected.

Members of parliament debated the issue of fuel subsidies earlier in June, and discussions will resume in early July.

Last week, parliament approved the draft general budget for 2017/18, referring it to the State Council for approval. Egypt has allocated 145 billion Egyptian pounds ($8 billion) for fuel subsidies in its budget for the 2017-18 fiscal year.

Parliament also made recommendations on the draft budget, which totals EGP 1.206 trillion.

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