CAIRO: Egypt’s oil minister expects its fuel subsidies bill to swell to LE 72 billion ($13 billion) in fiscal 2010/11, from LE 68 billion in 2009/10, and said on Tuesday the country aimed to restructure the program.
"Subsidies in petroleum and natural gas products have grown to unsustainable levels which form a significant burden on the petroleum sector," Sameh Fahmy said on Tuesday.
Fuel in Egypt is subsidized before it reaches the pump, meaning the discounted price is available to all. In contrast, subsidies for basic food items are only accessible to eligible Egyptians.
"Subsidies drain all the sectors’ revenues. We want the subsidies to reach those who deserve them most….and the rich don’t need them," Fahmy told a news conference.
"The country is planning to restructure the subsidies program," he said, without providing further details.
The 2010/11 fiscal year starts on July 1.
In May, Finance Minister Youssef Boutros-Ghali said Egypt would adjust its energy subsidies in the coming fiscal year upward by LE 32 billion without affecting the overall budget deficit.
Late last year, Prime Minister Ahmed Nazif said the subsidy program would be tightened to target the poor and rein in costs.
Egypt’s various subsidy programs cost the government some $19 billion in 2008/09, more than one-third of government spending.