Petroleum Ministry to nix proposed energy price increases
Minister of Petroleum Sherif Ismail - YOUM7 (Archive)

CAIRO: Minister of Petroleum Sherif Ismail confirmed Saturday the government had decided against increasing energy prices, even for high-energy consuming industries.

He said such price increase would have affected the production of vital and important industries including steel, cement and fertilizers, Al-Masry Al-Youm reported.

The increases also could have negatively affected production and increased the already high costs for citizens along with affecting the construction industry, it reported.

Ismail also said the government is working to amend the oil subsidy and that changes will not just affect prices, but also a number of different measures.

“Such new measures will include improving the mass transit system, expanding metro lines, rationing large quantities of oil used by private cars and applying the smart card system,” he said, adding that the government has finished distributing 2.2 million smart cards out of a scheduled 5.5 million.

He also said the petroleum ministry is working on providing needed quantities of oil to meet the growing needs of citizens.

This negates an announcement from Minister of Finance Hani Kadry in April, where he said the government would increase oil prices for high-consuming energy industries.

The new increases would have driven up the cost to $8 per million thermal units instead of the current $6, he said at the time.

Egypt uses 450,000 metric tons of diesel, 300,000 metric tons of butane gas and 500,000 metric tons of benzene monthly. It also imports $1.3 billion in oil products monthly.

Petroleum aid from the Gulf countries helped Egypt overcome the energy crisis it faced following the June 30 Revolution that toppled former President Mohamed Morsi. The crisis was the result of a large decline in foreign currency reserves at the Central Bank of Egypt, Tarek el-Molla, head of the Egyptian General Petroleum Corporation told Reuters.

Gulf petroleum aid from Kuwait, Saudi Arabia and the UAE was valued at $6 billion by April, and Egypt is scheduled to receive an additional $2.2 billion in petroleum aid from Saudi Arabia and the UAE in August, Molla said. The scheduled aid will be in monthly shipments valued between $650 and $700 million.

In his phone interview with Al-Masry Al-Youm, Ismail confirmed that the current electricity crisis, along with frequent power cuts, will end by September with the arrival of increased amounts of Gulf petroleum aid. He said the petroleum ministry will work to secure the oil supply as a step to improve services, achieve sustainable development and create job opportunities.

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