Egypt spent around LE14 billion ($1.8 billion) on petroleum subsidies during the first quarter of the current fiscal year 2015/16, the state owned daily newspaper Al-Ahram reported on Sunday, citing Petroleum Minister Tarek El-Molla.
As the government spent some LE18 billion ($2.3 billion) from July to September last fiscal year, El-Molla attributed the lower subsidy to the sharp decrease in global oil prices, expecting the bill to keep falling especially in the next two quarters, which would save around LE7 billion ($890 million) to the public treasury.
Brent crude, the global benchmark, touched an 11-year low of $35.98 per barrel last week.
The government has allocated an estimated LE62 billion ($8 billion) for petroleum subsidies in the current fiscal year compared to LE74 billion ($9.5 billion) that was spent in the fiscal year 2014/15, less than the projected LE100 billion ($12.7 billion).
Last year, the government slashed fuel subsidies to narrow the state budget deficit, raising prices at the pump by up to 78 percent.
Earlier this month, Egypt’s Prime Minister Sherif Ismail said Egypt seeks to reduce oil product subsidies to 30 percent over the next five years, reversing an earlier decision to fully eliminate the subsidies by that time.
On the other hand, the government increased spending on subsidised food, electricity and social benefits by an additional LE13 billion ($1.6 billion) from June to September 2015, according to the finance ministry’s monthly bulletin released in November.
The government is attempting to lessen the budget deficit this year to reach 8.9 percent of the GDP versus 11.5 percent last fiscal year.