CAIRO (Reuters) - Egypt’s oil minister expects its fuel subsidies bill to swell to 72 billion Egyptian pounds in fiscal 2010/11, from 68 billion in 2009/10, and said on Tuesday the country aimed to restructure the programme.
“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 subsidised 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 programme,” 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 32 billion pounds without affecting the overall budget deficit.
Late last year, Prime Minister Ahmed Nazif said the subsidy programme would be tightened to target the poor and rein in costs.
Egypt’s various subsidy programmes cost the government some $19 billion in 2008/09, more than one-third of government spending.