عربي English Türkçe اردو فارسى
Logo
Latest News
Business

IMF Lauds Egypt’s Decision to Lower Fuel Prices

A general view of a Mobil gas station in Cairo, Egypt, 04 October 2019. EPA/Mohamed Hossam
A general view of a Mobil gas station in Cairo, Egypt, 04 October 2019. EPA/Mohamed Hossam
TT
TT

IMF Lauds Egypt’s Decision to Lower Fuel Prices

A general view of a Mobil gas station in Cairo, Egypt, 04 October 2019. EPA/Mohamed Hossam
A general view of a Mobil gas station in Cairo, Egypt, 04 October 2019. EPA/Mohamed Hossam

Egypt has decreased fuel prices for the first time in decades, as it begins linking energy prices to international markets.

Although the drop was only around three percent, Egyptians welcomed the move in hopes for further price cuts.

International Monetary Fund (IMF) Mission Chief for Egypt Subir Lall lauded the pricing committee’s decision on Thursday to lower domestic fuel prices by 25 piasters.

In press statements, he noted that amending the prices of fuel products in Egypt comes in line with the mechanism of automatic pricing that was announced in July.

The mechanism allows for increasing or decreasing the prices of some fuel products every three months partly based on international oil prices, he added.

The price for 92-octane gasoline was lowered to 7.75 Egyptian pounds a liter from 8 pounds, while the cost of 80-octane gas dropped to 6.50 Egyptian from 6.75 pounds.

Egypt signed a three-year, $12 billion Extended Fund Facility on Nov. 11, 2016, after allowing its currency to weaken sharply, implementing a valued-added tax and raising fuel prices to reduce its balance of payments budget and deficits.

Also on Thursday Egypt lowered the domestic price of gas for the cement, metals and ceramics industries.

The domestic price of gas for the cement industry was set at $6 per million Btu from $8 and at $5.50 per million Btu for metals and ceramics sector from $7.

Most Viewed

 
 
Business

Oil Slumps More than 4% after Iran Downplays Israeli Strikes

Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo
Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo
TT
TT

Oil Slumps More than 4% after Iran Downplays Israeli Strikes

Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo
Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo

Oil prices tumbled more than $3 a barrel on Monday after Israel's retaliatory strike on Iran over the weekend bypassed Tehran's oil and nuclear facilities and did not disrupt energy supplies, easing geopolitical tensions in the Middle East.
Both Brent and US West Texas Intermediate crude futures hit their lowest levels since Oct. 1 at the open. By 0750 GMT, Brent was at $72.92 a barrel, down $3.13, or 4.1%, while WTI slipped $3.15, or 4.4%, to $68.63 a barrel, Reuters said.
The benchmarks gained 4% last week in volatile trade as markets priced in uncertainty around the extent of Israel's response to the Iranian missile attack on Oct. 1 and the US election next month.
Scores of Israeli jets completed three waves of strikes before dawn on Saturday against missile factories and other sites near Tehran and in western Iran, in the latest exchange in the escalating conflict between the Middle Eastern rivals.
The geopolitical risk premium that had built in oil prices in anticipation of Israel's retaliatory attack came off, analysts said.
"The more limited nature of the strikes, including avoiding oil infrastructure, have raised hopes for a de-escalatory pathway, which has seen the risk premium come off a few dollars a barrel," Saul Kavonic, a Sydney-based energy analyst at MST Marquee, said.
"The market will be watching closely for confirmation Iran won't counter attack in the coming weeks, which could see the risk premium rise again."
Commonwealth Bank of Australia analyst Vivek Dhar expects market attention to turn to ceasefire talks between Israel and Iran-backed militant group Hamas that resumed over the weekend.
"Despite Israel’s choice of a low aggression response to Iran, we have doubts that Israel and Iran’s proxies (i.e. Hamas and Hezbollah) are on track for an enduring ceasefire," he said in a note.
Citi lowered its Brent price target in the next three months to $70 a barrel from $74, factoring in a lower risk premium in the near term, its analysts led by Max Layton said in a note.
Analyst Tim Evans at US-based Evans Energy said in a note: "We think this leaves the market at least somewhat undervalued, with some risk OPEC+ producers may push back the planned increase in output targets beyond December."
In October, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, kept their oil output policy unchanged including a plan to start raising output from December. The group will meet on Dec. 1 ahead of a full meeting of OPEC+.