Government seeks to increase petroleum production, reduce subsidies to cover costs of providing oil products
Minister of Petroleum and Mineral Resources Tarek El-Molla said that the government is seeking to recover the costs of providing petroleum products in the local market. This will take place through increasing the production rates of raw petroleum, as well as continuing to reduce subsidies on petroleum products.
According to El-Molla, petrol consumption declined by 3% during the first nine months of this year, compared to the same period of the past fiscal year. Additionally, diesel consumption declined by 6%, while mazut production declined by 33%.
El-Molla said that the petroleumrelated companies that the government plans to list on the EGX will not all be in the sector of petroleum. However, they might be from the share of shareholders in those companies. He noted that the government is currently undertaking a due diligence examination for these companies in preparation for the offering process.
The petroleum subsidies bill during the first nine months of this year was estimated to be EGP 84bn, according to El-Molla.
“The Ministry of Petroleum is currently working to prepare a strategy for the Egyptian mining sector through contracting with a global consulting firm,” El-Molla added. It is expected that the initial study of the strategy will be completed by June, according to the minister.
El-Molla noted that his ministry aims to offer a tender for oil and gas exploration in the Red Sea by the end of this year.“Within the few upcoming months, we will also be launching a tender for gas and oil and exploration in the Mediterranean; specifically, in 10 or 11 areas there,” he added.