A female employee poses with a fuel pump at a petrol station in Cairo, Egypt, February 24, 2016. REUTERS/Mohamed Abd El Ghany
Egypt is not considering an increase in fuel prices before 30 June 2018, at the end of the current fiscal year, and is planning to stop importing gas before the end of next year, Egypt's oil minister Tarek El-Molla said at a press conference on Saturday.
El-Molla said that the government is planning to lift fuel subsidies gradually until they are entirely removed within five to 10 years. However, subsidies on diesel fuel and gas cylinders will remain in place, as it is difficult to provide gas in several areas in Egypt.
The minister said that the aim of lifting subsidies is to rationalise consumption – which has saved EGP 4 billion this year – and to guarantee that subsidies are benefiting only those who need them.
In November 2016, the government started cutting fuel subsidies as part of an economic programme – which also involved floating the currency – implemented to help secure a $12 billion IMF loan deal.
The last fuel subsidy cut came in June, with the government saying that economic reform measures can no longer be delayed.
El-Molla also said that Egypt is expected to stop imports of liquefied gas by the end of 2018, as production on the country’s giant Zohr gas field is set to start before the end of 2017.
Zohr is the largest natural gas field in the Mediterranean. Its discovery in 2015 nearly doubled Egypt's reserves.
In September, Prime Minister Sherif Ismail said that Zohr will be producing 500 million cubic feet of gas per day by the end of 2017.
El-Molla also said that Egypt has struck a deal with Iraq to import 12 million oil barrels annually, and is negotiating to double this amount starting January 2018.
An agreement was reached last April between Egypt and Iraq's state oil marketing company SOMO to sell the oil to Egypt. The first shipment was received last May.
El-Molla also said that investments in the oil sector are increasing. Investments reached $7.3 billion in fiscal year 2015/16, $8.1 billion in 2016/17, and more than $10 billion in 2017/18.