Petroleum product subsidies to hit $5bn in Egypt’s FY2016-17 budget

The total volume of Egyptian subsidy on petroleum products is set to be raised to around 64 billion Egyptian pounds (US$4.9 billion) during financial year 2016-17 due to the free-floating currency move.

An official source in the Egyptian General Petroleum Corporation (EGPC) told Amwal Al Ghad Monday that this increase -which is estimated at US$4.1 billion- is due to floating the Egyptian pound as well as the rise in global oil prices.

The source added that the cost of petroleum product subsidies is expected to climb by 83 percent higher than what the government estimated in current budget at 36 billion pounds.

On Friday, the Egyptian Cabinet raised fuel prices by 30-47 percent following the decision of Egypt’s Central Bank (CBE) to float Egyptian pound and hike key interest rates by 300 basis points.