Egypt’s fuel subsidies to exceed 100 bln pounds in FY2019

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Egypt’s fuel subsidy will reach more than 100 million pounds within the financial year 2018/2019 budgeting, said a government source on Thursday.

The increase in fuel subsidies is mainly driven by the hike in global oil prices, the source told Enterprise.

The Egyptian government cut fuel subsidies for the current financial year to 89 billion pounds from 110 billion pounds.

The source noted that the government has not inclined to hedge against risks of the increase in oil prices yet, but it may consider the step this year if global prices maintained rising.

Earlier this week, EFG Hermes’ economist Mohamed Abu Basha told Bloomberg that every increase of $10 in oil prices over the $67 per barrel set in the financial year 2018/2019 budget adds $1 billion to 1.2 billion to Egypt’s current account deficit.