CAIRO: The Egyptian government considers cutting fuel subsidies to 80 billion EGP ($11.5 b) in the fiscal year 2015-16 instead of the 100 billion EGP now planned for, said Investment Minister Ashraf Salman Thursday.
“Before coming to such a decision, the government will put in consideration the potential social implications,” Salman said in a phone call with Al-Hayah Al-Youm talk show Thursday.
The decision of cutting petroleum products subsidies aims at decreasing its consumption and reducing the deficit accordingly after four years of political turmoil that has battered the economy.
The government is also trying to encourage more oil and gas exploration as well as seeking energy shipments from abroad.
In July, the government has lifted subsidies on natural gas and has cut bread subsidies by 13 per cent in the new budget of fiscal year 2014/2015.
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, said Minister of Finance Hany Kadry, according to Youm7