UPDATE 1-Arab Countries to Send Oil Product Aid to Egypt to Sept-Finmin

Arab countries will extend aid to Egypt in the form of petroleum products until at least September, Finance Minister Hany Qadry Demian said on Thursday, a move that will help avert an energy crunch expected in the summer when consumption soars.

Saudi Arabia, the United Arab Emirates and Kuwait have rushed to provide aid to Egypt, including around $4 billion worth of oil products sent between July and December, since the army deposed Islamist President Mohamed Morsi after mass protests.

“Arab aid for petroleum products offered to Egypt will continue until next September or October,” Demian, who took office last month in a surprise cabinet reshuffle, said in a text message to Reuters.

Last month, Egypt’s oil minister said the country would need to import $1 billion worth of petroleum products to meet energy needs for the summer.

Fuel subsidies cost Egypt’s government $15 billion a year, a fifth of the state budget. The money keeps pump prices well below market values, giving Egyptians no incentive to curb their consumption.

 Egypt also requires liquefied natural gas (LNG) for power generation, in short supply due to declining local production, even as it cut into exports of LNG previously promised to foreign firms.

Source:Reuters