The head of the Egyptian General Petroleum Corporation (EGPC), Tarek Al-Hadidi, has said that the country’s expenses on petroleum subsidies dropped by 23% to $6.27 billion in 2015/2016.

Subsidies on petroleum products in Egypt cost 71.5 billion pounds in 2014/2015 and the country plans to reduce it to about 35 billion in 2016/2017.“Petroleum product subsidies have decreased to 55 billion Egyptian pounds in 2015/16 from a targeted 61 billion pounds. The reason for the decrease is lower global oil prices,” al-Hadidi told Reuters.

The Egyptian government in 2014, reduced expenses on energy subsidies and this resulted to an increase of as much as 78% in domestic price of natural gas, diesel and other fuels.

Egypt is making effort to revive its economy and the government has been struggling to reduce subsidies, which consumes a huge part of the budget.

The President, Abdel Fattah El-Sisi (photo), in April approved a draft state budget that lowers the budget shortfalls in the 2016/17 financial year to 9.8% of gross domestic product (GDP) from the current 11.5%.

Anita Fatunji