The Cabinet has decided to postpone the hike in energy prices, scheduled for July, due to the worldwide decline in prices of oil, Petroleum Minister Sherif Ismail said.
The minister stressed that the government intends to liberate energy prices over the next five years, ending in 2019.
During a press conference on Wednesday, the minister confirmed that the decision is final, adding that the conflicting reports are untrue. He explained that the decline in the crude oil price has lowered the subsidy estimates in the current budget to less than LE70 billion, down from the budgeted LE 100 billion.
Ismail said the decision would not affect Egypt’s commitment to the economic reform plan, but stressed that choosing the time for reforms should be based on current circumstances.
The ministry, according to Ismail, will finalize the plan to liberate the gas sector from state control within six months, which will allow the private sector, for the first time, to import gas to cover its needs. “Consequently, any company founded for that purpose will have the right to use the government’s gas network, harbors, all of the infrastructure in return for a tariff that will be agreed on,” he said.
Regarding the imports of gas from Israel, the minister said that no requests have been submitted to the ministry in this regard, adding that the companies that will be authorized to import gas will have comply to a set of conditions, such as approval from the security sector.
With regard to the agreement on developing gas fields north of Alexandria, signed with British Petroleum during the economic summit, the minister said it will generate around US$2 billion annually in savings.
This project, suspended in 2010, has been the main reason behind the gas crisis in Egypt, he said, adding that production was scheduled to start in 2014. According to the new agreement, it should begin in 2017.
The minister added gas will be imported from Cyprus starting in 2018, indicating that an agreement has been signed over technical studies to establish a maritime pipeline, linking gas fields in Cyprus with Egypt.
The ministry will provide all the necessary resources to generate electricity during summer, he said. Several contracts have been signed with a number of countries to import gas during that period.
Edited translation from Al-Masry Al-Youm
