CAIRO: Egypt is adopting a plan to slash energy subsidies to reach 61 billion EGP ($7.8 billion) during this fiscal year (to end June 30,) newly appointed Prime Minister Sherif Isamail said late Saturday.
Egypt’s government is working to tackle the worst energy crisis that the country has faced over the past years due to fuel shortfalls at power plants, and increasing demand.
“Energy subsidies are to be cut by 70 percent within five years and it will be delivered to those to deserve it,” Ismail said during a conference hosted by the Egyptian- French Business Council.
In July, 2014, President Abdel Fatah al-Sisi raised fuel prices as energy subsidies were slashed in a revised and tightened budget to 100.3 billion EGP, with the aim of containing the budget deficit.
Meanwhile, oil subsidies during FY 2014/2015 amounted to 70 billion EGP, down from the estimated 100 billion EGP on the back of a sharp slip in global oil prices in the second half of the past fiscal year.
The prime minister further noted that several power plants will be operational in 2016, adding that energy is a “key factor” for achieving the targeted economic growth rates and is a driver of investment.
Over the past two years, Egypt’s oil sector has signed 54 new exploration agreements to secure energy needs.
“Egypt’s recent gas finding in the Mediterranean will represent around 70 percent of the country’s natural gas production in the coming period,” said Ismail.
At August-end, Italy’s energy company Eni SpA announced it had discovered a “supergiant” natural gas field in the deep water of Egypt’s Mediterranean, with a potential 30 trillion cubic feet of gas over an area of 100 square kilometers.