(PHOTO / AFP)
By Abdel Razek Al-Shuwekhi
The removal of diesel subsidies will not happen all at once and will take place at the beginning of next November, according to Minister of Tourism Hisham Zaazou. The Ministry of Finance agreed to allocate EGP 2bn of next year’s fiscal budget in order to remove diesel subsidies for the tourism sector.
Responding to a question concerning the signing of a cooperation protocol with Visa for electronic payments, the minister said: “The Ministry of Tourism will bear the price difference of these new provisions for one year.”
Hotels and tourist transportation companies will obtain one litre of diesel for EGP 1.10, while the Ministry of Finance plans to raise the price to EGP 5.35 per litre.
According to the Egyptian General Petroleum Corporation, subsidies for the tourism sector are worth EGP 12.5bn annually.
Zaazou believes that ending energy subsidies is a necessary measure in light of Egypt’s rising budget deficit.
The tourism sector represents 11.3% of Egypt’s GDP and is the largest source of income for the economy after remittances from Egyptians abroad.
During the first quarter of this year, the decline in Egypt’s tourism income has decreased to EGP 1.3bn, down by 43%, according to the National Accounts Division of the Ministry of Tourism.
The minister said: “We will work to launch a range of air routes to the Arab Gulf States at the end of this May while also introducing routes to Milan, Italy and Manchester, UK.”
Incoming European tourism to Egypt represented 72% of total incoming tourism to Egypt annually.
The countries of the European Union issued a travel warning to their citizens about visiting the Sinai Peninsula last August after the bombing of a tourist bus near the Taba border crossing with Israel.
