Several government agencies have stopped paying for fuel products they are receiving from the EGPC in light of their need for this money in order to pay dues they owe to partners and banks. Dues owed to the Petroleum Authority by government agencies are approximately EGP 163bn, according to an official at the Ministry of Petroleum.
The Ministry of Finance has accrued EGP 95bn in debt owed to the Petroleum Authority, which includes some EGP 32bn for subsidy differentials, or the difference in price for fuel products given to power plants.
The Ministry of Finance’s debts have increased as a result of not paying the value of petroleum products in full. This has forced the Petroleum Authority to pay for these products from its own resources, leading to an accumulation of debts, according to the official.
Approximately EGP 50bn in subsidy support has been settled. This amount was discounted from the authority’s revenues that were to be paid to the state treasury in the form of taxes and customs owed by them to the state.
There has been no settlement of the value of subsidies from the second half of the current fiscal year, which is valued at approximately EGP 64bn through now, according to the official.
The total dues owed to the authority by EgyptAir is approximately EGP 5bn as the company has not been paying for fuels it receives in full, and has stopped paying monthly installments agreed to in their debt repayment schedule, which comes to EGP 25m.
The official pointed that total dues owed to the authority, from parties as varied as the ministries of electricity or transportation, the railways, contractors, and industrial consumers is approximately EGP 63bn.
Should the authority liquidate the dues owed it to by government agencies in debt this will bring them EGP 30bn.
The official stressed that the continuously growing dues owed to the EGPC by government agencies makes it unable to commit to repayments of dues owed to foreign partners and suppliers.
Foreign petroleum companies operating in Egypt are planning to invest $8.2bn in research for petroleum and gas over the coming fiscal year in order to conduct comprehensive research, exploration, and development for operating expenses, according to Tareq Al-Mula, head of the EGPC.
There are currently 70 international oil companies operating in Egypt in the areas of research and exploration and production. The total amount of foreign investments in the Egyptian petroleum sector in the area of research and exploration and development over the past fiscal year was approximately $8bn.