VenturesNow

Egypt must import $1.18 billion worth of petroleum to address power outages— Prime Minister

Published

6 months ago

June 27, 2024

Egypt’s Prime Minister, Mostafa Madbouly, stated in a televised speech on Tuesday that the country needed to import some $1.18 billion worth of natural gas and mazut fuel to put an end to the country’s ongoing power outages, which have been made worse by recent heat waves.

By the third week of July, the administration expects to have received all of the cargoes, at which point it plans to cease power outages for the remainder of the summer, he continued.

To increase its strategic stocks, it has already begun contracting for 300,000 tonnes of mazut worth $180 million, which is anticipated to arrive early next week.

In response to a spike in home electricity demand during the most recent heat wave, Egypt’s government on Monday extended daily power outages to three hours from two hours earlier.

According to Madbouly on Tuesday, these three-hour cutbacks would last until the end of June. After that, they will resume at two hours for the first part of July, to cease entirely for the remainder of the summer.

The impact of the blackouts has sparked a flurry of complaints on Egyptian social media, with some users claiming they have been compelled to buy private power generators.

Teenagers getting ready for the important high school diploma have been especially affected by the issue; some have posted about pupils studying in coffee shops and by candlelight. In the seaside city of Port Said, a wedding hall owner announced that he would convert one of his ballrooms into a study hall.

Since July of last year, most areas have seen scheduled daily power outages lasting two hours due to load shedding caused by declining gas supply, increasing demand, and a lack of foreign cash.

“We had said that we planned to end load shedding by the end of 2024… we do not have a power generation problem or a network problem, we are unable to provide fuel,” Madbouly said on Tuesday.
“With the increase in consumption related to the major development and population increase, there has been a lot of pressure on our dollar resources,” he added.

Without identifying the nation or the gas field, he said that production in a nearby country had completely stopped for 12 hours, disrupting the supply.

Abu Qir Fertilizers, based in Egypt, announced on Tuesday that three of its units had stopped producing due to a disruption in their natural gas supply.

VenturesNow

IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

1 hour ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

VenturesNow

Libya’s eastern govt accepts petrol subsidy elimination

Published

1 hour ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.