Egypt's Fuel Pricing Committee Evaluates Rates amid 12% Hike in Global Oil Prices

Sources at the General Petroleum Corporation stated that global oil prices are currently exceeding the barrier of $86 per barrel, with an increase rate of about 12% during the last quarter of 2021 and the beginning of January 2022.

The sources added that the increase in the price of a barrel of Brent crude requires moving the prices of petroleum products by no more than 10% during the period from January until the end of next March.

They indicated that the committee's decisions may take into account the social dimension, especially with the increase in gasoline prices during the committee's decision in its previous meeting, but it kept the price of diesel unchanged despite its high prices globally and thus its cost significantly.

The Fuel Pricing Committee is preparing to announce the new petroleum product price map that will be implemented in the first quarter of 2022, within a maximum of 4 days, after the committee finishes evaluating the oil price curve during the last quarter of last year 2021.

Sources at the General Petroleum Corporation said that the new prices will be announced after notifying the regulatory authorities and the Council of Ministers, provided that the price bulletin will be distributed to gas stations to start working with it from the date of the notification, whether the committee's decision is to move or fix prices.

Global oil prices have witnessed a remarkable rise recently, as the price of a barrel exceeded $80 a barrel, which is $62 higher than the estimated price of a barrel of oil in the state’s general budget for the current fiscal year.

Egypt has implemented an automatic pricing mechanism for some petroleum products since July 2016, after their prices reached the cost level through a program it implemented over several years to liberalize fuel prices.

Fuel subsidies declined during the past 6 years, as the total subsidies during the fiscal year 2014/15 amounted to about EGP 73.9 billion, and in 2015/16 it amounted to EGP 51 billion, then fuel subsidies rose again in the fiscal year 2016/17 and scored about EGP 115 billion. The maximum rise was recorded in the year 17/2018, reaching EGP 120.8 billion, to begin the phase of reducing subsidies clearly in the year 2018/19, which at that time recorded EGP 84.7 billion, and in the fiscal year 2019/20, it recorded EGP 18.7 billion.

Egypt's imports of fuel during the month of October

Egypt's total imports of fuel rose to about 836 million dollars last October, compared to $577 million in October 2020, with an increase of nearly $260 million.

According to the Central Agency for Mobilization and Statistics, the value of crude oil imports recorded about 250 million dollars in October 2021, compared to the value of imports of $253 million in October 2020, with a decline of nearly $3 million.

As for petroleum products, the value of its imports amounted to about $570 million, compared to $307 million during the same comparison period, with an increase of nearly $260 million.