Mohamed Abdel Fattah, director of the budget department at the Finance Ministry, said at a press conference on Thursday that the state budget of the 2015/2016 fiscal year would not increase fuel prices.
Abdel Fattah added that the budget would focus on avoiding subsidy leakages by applying the smart cards system and rationalizing petroleum products.
Finance Minister Hany Qadry Dimian the government public spending policy aims to reform the energy subsidies system.
The International Monetary Fund said Egypt is expected to reduce fuel subsidies from 3.1 percent to 1.2 percent of GDP in the next fiscal year.
In its report issued last February about the outcome of consultations conducted with the Egyptian government earlier last year, the fund said subsidies of petroleum products are $13.3 billion this fiscal year, down 20 percent from the $16.7 billion of last fiscal year.
The report also said that energy subsidies have for long been part of the social contract in Egypt, pointing out that the government had in June 2014 reduced energy subsidies for the commercial and domestic sectors by raising prices of diesel fuel by 64 percent, 80 octane gasoline fuel by 78 percent and 92 octane fuel by 41 percent, resulting in annual savings of 2 percent of GDP.
Petroleum Ministry officials had said earlier that fuel subsidies fell to LE45 billion in the first half of the 2014/2015 fiscal year, compared to LE64.5 billion in the same period of the previous fiscal year, a decrease of 30 percent.
Edited translation from Al-Masry Al-Youm
