Egyptian authorities agreed with the International Monetary Fund (IMF), to implement several reform measures by 15 June 2019, including a prime ministerial decree to implement a fuel price indexation mechanism for all fuel products in June, except gasoline octane 95 (a decree was already issued in December 2018), liquefied petroleum gas (LPG), and fuel oil used in bakeries and for electricity generation.
Authorities are also planning to hedge oil prices, but the IMF advised caution in using financial instruments with upfront costs which merely temporarily protect against extreme price movements, the IMF’’s staff report for the fourth review of the Egyptian economy said on Saturday.
Reform of electricity subsidies will continue as planned toward the goal of full elimination by 2020/21, mentioned the report. It also explained that the list of Egypt’s expected reforms also includes the government’s plan to bring to market shares in at least four of its state owned enterprises (SOEs) by 15 June 2019.
Prime Minister Mostafa Madbouly, will approve a reform plan to ensure that SOE’s procurement rules are consistent with the new Government Procurement Law by 15 June 2019, added the report.
On February 4, 2019, the executive board of the IMF completed the fourth review of Egypt’s economic reform programme, supported by an arrangement under the Extended Fund Facility.
The completion of the review allowed the authorities to draw the equivalent of special drawing rights (SDRs) to 1,432.76m (about $2bn), bringing total disbursements to SDRs up to 7,163.81m (about $10bn).