Gov’t ups fuel prices slightly on high world oil prices

Ahmed Kamel

The Petroleum Products Automatic Pricing Committee raised yesterday gasoline prices by LE0.25 (less than two US cents) and kept diesel unchanged at LE6.75 per liter.

The committee increased prices of 80-octane, 92-octane, and 95-octane fuel to LE7.25, LE8.5 and LE9.5, respectively. The committee is in charge of following up and implementing a price mechanism on a quarterly basis. The new prices will apply until end of March.

The committee was launched in 2019 for automatically amending the local fuel prices according to world oil markets. The pricing is set taking into account a number of factors, i.e. Brent prices, the exchange rate, the cost of manufacturing operations, transportation, trading and distribution expenses, administrative fees, commissions and tax.

The committee sets fuel prices every quarter, provided that prices do not exceed ±10 per cent, in a bid to protect the consumers from world price shocks.

The automatic pricing mechanism is part of an overall economic reform program that was launched in November 2016. The mechanism is aimed at ironing out price distortions. It has contributed to the rationalization of consumption on thre local market.

Oil prices climbed yesterday extending sharp gains in the previous session as frigid weather swept across large swathes of the United States, threatening to further disrupt oil supplies.

Brent crude rose 42 cents, or 0.5 per cent, to $91.53 a barrel after rising $1.16 on Thursday, according to Reuters data.

The automatic pricing mechanism has lured more fresh investments into the petroleum sector. The state’s economic reforms which targeted fixing price distortions of petroleum products have boosted the sector’s growth over the past years.

Seeking means to boost the nation’s oil and natural gas production, the government has pumped investments worth more than LE1.2 trillion (around $77 billion) into the petroleum sector over the past seven years.

Egypt’s petroleum sector launched in 2016 a development and modernization project in line with the nation’s vision for sustainable development by 2030. Seven programs tackling all aspects of the petroleum industry have been carried out since 2016.

Petroleum Minister Tarek el-Molla has revealed that a total of LE773 billion were injected in finished projects, while investments worth LE295 billion were pumped in underway projects.

The petroleum sector has significantly recovered as the minister revealed earlier that the petroleum sector had repaid more than 85 per cent of the foreign partners’ dues, which were accumulated on the period between 2011 and June 2013.