Officials from Egypt’s government told Al Borsa on June 16 that every $1 increase in global oil prices above the budgeted level adds roughly EGP 4bn–4.5bn ($76.9mn-$89.5mn) per year to public spending and exerts more pressure on the fiscal policies.
Brent now hovers at $74.23 per barrel and WTI at $72.98. The government's conservative estimate for oil prices is $75/barrel for the proposed 2025/26 budget, lower than the current year’s benchmark of $82. Any small upward price movements could significantly inflate subsidy and import costs, straining state finances.
The current geopolitical tensions between Iran and Israel add to the price volatility. JPMorgan Chase predicts prices could reach $130 a barrel if the conflict intensifies. Such levels would severely exacerbate Egypt’s financial burden.
In H1 of FY 2024/25, Egypt’s fuel subsidies amounted to EGP 71bn ($1.41bn), nearly half of the annual allocation of EGP 154bn. The 2025/26 budget anticipates a sharp reduction to cap fuel subsidies at EGP 75bn. This is part of a wider subsidy reform strategy to free up resources for priority development initiatives.
Egypt currently imports approximately 225,000 barrels of oil per day (bpd) to meet domestic demand, while production stands at between 510,000 and 540,000 bpd.
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