The Ministry of Petroleum has modified all the concluded contracts with foreign companies to supply petroleum products and gas shipments. Among the modifications is an increase in the period of repayment to three months from the date of the shipment’s arrival instead of the previous 30 days.
Petroleum Minister Tarek El-Molla told Daily News Egypt that the repayment period of the shipments was increased for all companies in order to provide them with the longest period possible to collect the value of the petroleum products and gas shipments.
He added that the value of the fuel shipments is being repaid regularly in order to meet the market’s needs of gasoline, diesel, and fuel oil on a regular basis.
El-Molla estimated the average value of monthly imports of petroleum products and natural gas to meet the local market’s needs at $795m.
Nearly 1.3bn cubic feet of gas are imported daily, he explained. They are portioned into 1.2bn cubic feet through the two gasification ships in Sokhna Port and the remaining 100m through the Jordan line.
The Petroleum Minister said that after contracting a third gasification ship, total importing capacity will reach nearly 1.95bn cubic feet of gas daily through the gasification ships in Ain Sokhna.
He explained that average monthly consumption of petroleum products and natural gas in the local market is estimated at 6.5m tonnes. About 4.20m tonnes are provided through local production in the different concession areas.
About 2.30m tonnes of petroleum products are imported monthly, including benzene, diesel, butane, and fuel oil, in order to meet the local market’s needs, said the minister.
El-Molla noted that so far Egypt has obtained petroleum product shipments worth approximately $860m over the past three months. This was part of the deal made with Saudi Arabia to provide the country with a portion of its fuel requirements for five years.
The deal with Saudi Arabia stipulates calculating the value of the petroleum product shipments according to global prices during the time of export, he said.
The Minister of Petroleum said that the shipments agreed upon with Aramco arrive at Egyptian ports on time. They are then unloaded and distributed inside the local market in order to meet growing demand during the summer.
Total local production of crude oil is estimated at 695,000 barrels daily. The Ministry of Petroleum plans to increase this amount to 700,000 barrels in fiscal year 2017/2018, in addition to about 4bn cubic feet of gas daily.
Egypt has been suffering a chronic US dollar shortage, which has hindered companies seeking the greenbacks. On the parallel market, the US currency rose above EGP 13 against the national currency in a matter of weeks. Banks could do little to provide hard cash to consuming sectors and, with the state trying to minimise operations of exchange bureaus, the Egyptian market has become paralysed.