Egypt holds price of 95-octane petrol through Q2 — ministry

Egypt will keep 95-octane petrol at 7.75 Egyptian pounds ($0.4485) per liter through the second quarter of 2019. (File: Reuters)
Updated 31 March 2019

Egypt holds price of 95-octane petrol through Q2 — ministry

  • 95-octane petrol will remain at 7.75 Egyptian pounds ($0.4485) per liter through the second quarter of 2019

CAIRO: Egypt will keep 95-octane petrol at 7.75 Egyptian pounds ($0.4485) per liter through the second quarter of 2019 as it links the cost to international fuel prices for the first time, the petroleum ministry said in a statement.
Egypt had committed to the indexation mechanism as part of reforms tied to a $12 billion International Monetary Fund program and designed to increase energy prices to match those on international markets.
A committee decided to hold 95-octane petrol’s price based on the Egyptian pound’s appreciation against the dollar and global prices of Brent crude, the ministry said.
“There has been an uptick in inflation and the government has just issued a decision to increase the minimum state salaries,” said Angus Blair, chief operating officer at Cairo-based investment bank Pharos Holding.
“It may have decided to defer any increase until inflation comes off a little further, as inflation is on a longer-term downtrend, and the state employees are paid the new salaries. I would now expect fuel price increases in July or August.”
As part of the IMF deal, Egypt has been pushing ahead with tough economic reforms that have strained the budgets of tens of millions of citizens.
They included the introduction of a value-added tax, a currency devaluation and deep cuts to energy subsidies that included a hike in petrol prices of up to 50 percent last June.
About $10 billion has now been disbursed under the deal, with a final tranche due after another review in June.
The petroleum minister had said in January that Egypt would implement the automatic price indexation mechanism on 95-octane petrol starting in April.
The IMF cited those promised changes in a statement last month, saying: “The authorities remain committed to reaching cost recovery for most fuel products by mid-2019 and implementing automatic fuel price indexation.” ($1 = 17.2800 Egyptian pounds)

Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.