The global price of a barrel of oil hiked to $78.13 and will threaten the target deficit in next year’s draft budget, according the MP Yasser Omar of parliament’s planning and budget committee.

In an exclusive statement to Daily News Egypt, Omar said that the price of Brent crude is expected to decrease again because if it hikes over $80 per barrel, it would bring back the idea of shale oil. He added that these expectations may force the planning and budget committee to increase allocations in the draft budget to 6%, up from 3-5% of total expenditure.

The financial statement of the draft budget for the next fiscal year (FY) showed the value of financial allocations for petroleum subsidies at EGP 89bn compared to EGP 110bn this year.

The financial allocations for subsidisied fuel in the coming FY are based on a Brent crude price of $67 per barrel.

Each $1 increase in Brent crude price would cost the state EGP 4bn, according to the draft budget.

Omar added that the committee will discuss the matter with the minister of finance during an upcoming meeting, adding that the budget is still with the committee and it has yet to finalise it.

The planning and budget committee aims to complete the budget within two weeks and write its final report on it to be brought before a plenary session in June.

The government aims to bridge the budget deficit in the coming FY to 8.4% and achieve a growth of 5.8%.

Expenditure during the next FY is expected to be EGP 1.4tn compared to EGP 990bn this FY.