CAIRO: Minister of Petroleum Sherif Ismail announced on Wednesday that energy prices including for diesel oil and solar will soar in the upcoming period to coincide with a government plan to ration the oil subsidy and amend the energy system, El Watan reported.
Ismail said such actions would take five years to take effect and assist the poor.
The government announced last April it was increasing energy prices for high-energy consuming industries and for natural gas, but last week it announced it would not increase oil prices even for high-energy consuming industries, arguing that the price increase would negatively impact production of vital industries including cement and steel, and increase citizen burdens.
During the World Banking Conference in Jordan on Thursday, Minister of Finance Hany Kadry announced the next fiscal year will witness vital economic reform, including an amendment of the oil subsidy and an increase in oil prices, Reuters reported.
Oil subsidy spending accounts for one fifth of the budget, Reuters reported, and the oil subsidy exploits more than 100 billion EGP yearly. If the government did not reform the subsidy system, expenditures would soar by 10 to 12 percent to total 130 billion EGP, Kadry said.
Reforming the oil subsidy began when the government imposed a smart card system a few months ago that controls the amount of fuel distributed at a subsided price, which is estimated to save between 30 to 40 billion EGP annually.