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Egypt Reduces Jet Fuel Prices to Boost Aviation, Tourism Sectors

A worker gesturing for cars to move as others fill up at a petrol station in Cairo, Egypt on June 29, 2017 [KHALED DESOUKI/Getty Images]
A worker gesturing for cars to move as others fill up at a petrol station in Cairo, Egypt on June 29, 2017 [KHALED DESOUKI/Getty Images]
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Egypt Reduces Jet Fuel Prices to Boost Aviation, Tourism Sectors

A worker gesturing for cars to move as others fill up at a petrol station in Cairo, Egypt on June 29, 2017 [KHALED DESOUKI/Getty Images]
A worker gesturing for cars to move as others fill up at a petrol station in Cairo, Egypt on June 29, 2017 [KHALED DESOUKI/Getty Images]

Egypt will reduce jet fuel prices by 15 cents per gallon from January 21 until the end of 2021 to support the tourism and aviation sectors amid challenges posed by COVID-19 pandemic.

The decision came during the fourth meeting between Minister of Petroleum and Mineral Resources Tarek El Molla, Minister of Tourism and Antiquities Khaled Al-Anani, and Minister of Civil Aviation Mohamed Manar to discuss ways to boost the affected sectors.

For his part, Anani hailed the initiative, saying it will boost tourism in Egypt by motivating international companies to increase their flights.

Also, Manar praised the petroleum sector’s effort and support in providing fuel to all Egypt’s airports.

In a related context, Egypt and the International Islamic Trade Finance Corporation (ITFC) signed a finance cooperation program for 2021, providing the country with integrated financing solutions worth $1.1 billion.

The funds come as part of the $3 billion agreement concluded between the Ministry of International Cooperation and the ITFC in 2018.

The signing ceremony was attended by Minister of Planning and Economic Development and Egypt’s Governor at the Islamic Development Bank Group Hala El-Said, Minister of Petroleum and Mineral Resources Tarek El Molla, Minister of Supply and Internal Trade Aly Meselhi, Minister of International Cooperation Rania Al-Mashat, and Minister of Trade and Industry Nevine Gamea.

The program was signed by ITFC CEO Hani Salem Sonbol, Executive Vice President of the Egyptian General Petroleum Corporation (EGPC) Ashraf Abdullah, and Vice-Chairperson of the General Authority for Supply Commodities (GASC) Ahmed Youssef.

According to Molla, the five agreements have a total value of $9.2 billion, including the fifth framework agreement signed at the end of January 2018 at a value of $3 billion. For the financing of basic commodities, 16 financing operations amounting to $2.225 billion were approved within the agreement’s framework.

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Oil Prices Fall More than 1% as Hurricane Rafael Risk Recedes

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Fall More than 1% as Hurricane Rafael Risk Recedes

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices fell on Friday on receding fears over the impact of Hurricane Rafael on oil and gas infrastructure in the US Gulf while investors also weighed up fresh Chinese economic stimulus.

Brent crude oil futures lost $1.04, or 1.38%, to $74.59 a barrel by 1243 GMT. US West Texas Intermediate (WTI) crude was down $1.22, or 1.69%, at $71.14.

The benchmarks have reversed Thursday's gains of nearly 1%, but Brent and WTI are still on track to finish 2% up over the week, with investors also examining how US President-elect Donald Trump's policies might affect oil supply and demand, Reuters reported.

Hurricane Rafael, which has caused 391,214 barrels per day of US crude oil production to be shut in, is forecast to weaken and move slowly away from US Gulf coast oilfields in the coming days, the US National Hurricane Center said.

Downward price pressure also came from data showing crude imports in China, the world's largest oil importer, fell 9% in October - the sixth consecutive month to show a year-on-year decline.

"The weakening of oil imports in China is due to weaker demand for oil as a result of the sluggish economic development and rapid advance of e-mobility," said Commerzbank analyst Carsten Fritsch.

China kicked off a fresh round of fiscal support on Friday, announcing a package that eases debt repayment strains for local governments.

The nation's economy has faced strong deflationary pressures in the face of weak domestic demand, a property crisis and mounting financing strains on indebted local governments, limiting their investment capability.

"There were no additional stimulus measures targeting domestic demand, hence the disappointment weighing on prices," UBS analyst Giovanni Staunovo told Reuters.

Prices had risen on Thursday on expected actions by the incoming Trump administration, such as tighter sanctions on Iran and Venezuela, which could limit oil supply to global markets.

"In the short-term, oil prices might rise if the new President Trump is quick on the draw with oil sanctions," said PVM analyst John Evans.

US Federal Reserve Chair Jerome Powell said on Thursday that Trump's proposed policies of broad-based tariffs, deportations and tax cuts would have no near-term impact on the US economy, but the Fed would begin estimating the impact of such policies on its goals of stable inflation and maximum employment.

The Fed cut interest rates by a quarter of a percentage point on Thursday.