Source : Egypt’s energy subsidy costs down 30 pct in first half 2014-15

Plummeting global oil prices mean Egypt spent 30 percent less on energy subsidies in the first half of 2014-15 than it did in the same period of the previous fiscal year, an oil ministry source said on Monday.

The government spent 45 billion Egyptian pounds ($6.35 billion) on energy subsidies in the first six months of the fiscal year that began in July, reaping the benefits of declines that have seen oil prices lose over half their value.

Benchmark Brent crude was trading below $50 a barrel on Monday compared with the year's peak in June above $115.

Egypt has struggled with soaring energy bills caused by high subsidies it provides on fuel for its population of 86 million. The subsidies have helped turn Egypt from a net energy exporter into a net importer over the last few years.

The government slashed fuel subsidies in July to ease the burden on a swelling budget deficit, raising prices of mainstream fuel products by up to 78 percent.

It had originally assumed oil prices of $109-$110 a barrel in its 2014-15 budget and planned to spend about 100 billion pounds on energy subsidies during the fiscal year.

The oil minister said in December that if oil prices remained at below $60 a barrel for the rest of the fiscal year, the government could end up spending less than 70 billion pounds on the subsidies. 

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