Petroleum products' subsidies hit EGP 55 bln expected to increase

Minister of Petroleum and Mineral Resources Tarek el Molla said Saturday subsidies on the petroleum products hit EGP 55 billion in the fiscal year that ended on June 30, 2016.

Addressing the closing session of the monthly National Dialogue for Youth, the minister added the number is expected to increase.

Molla said Egypt imports 35 percent of the local market needs of petroleum products as the domestic production is not enough.

He added that the imported petroleum products cost the state $800 million monthly, with the continued increase in crude oil prices, which makes the country more vulnerable to the global market turmoil.

The Ministry of Electricity alone consumes 42 percent of petroleum products, the minister said.

The increase of the subsidy burden affects exploration and investment activities in the development of fields, as well as the foreign exchange reserve, he added.

Molla said the fuel smart cards aim to rationalize fuel consumption and will be enforced soon.