By Islam Zayed
The Ministry of Finance has released funds in the amount of $150 million to Egyptian General Petroleum Corporation (EGPC) to secure the country’s needs of petroleum products in light the continuous shortage of petroleum supplies. Such deficit is a result of the EGPC’s consecutive losses and its inability to provide the needed quantities of petroleum products.
According to Ayman Gohar, Head of the Office of the Minister of Finance, a committee has been formed between the Ministry of Finance and the Ministry of Petroleum to determine whether additional funds to the EGPC are needed. In addition, the committee seeks to come up with a permanent solution to the intermittent problem of petroleum products shortage, which has exhausted the state’s budget.
The issue of petroleum subsidies, Gohar added, is one of the top priorities for the forthcoming cabinet; finding a solution to such problem is paramount to alleviating the state budget from the burden of continuously aiding the petroleum sector. He also stressed the need to set a timeframe for a gradual rationalisation of subsidies to assure that they only suffice citizens’ needs, in addition to lifting subsidies off any other entity that is not directly linked to citizens. Doing so would go a long way towards reducing the funds needed for petroleum subsidies.
The government has also decided to reform the fiscal structure of the EGPC by assessing its assets and reviewing expenditures on its subsidiaries. The reform initiative is intended to readjust the EGPC’s fiscal standing in order to resolve the shortage crisis, especially as the EGPC currently owes EGP 34 billion to a number of banks.