(Photo by: Mohamed Omar)
The Ministry of Petroleum and Mineral Resources denied that airlines have requested to continue paying for fuel used in flights using the Egyptian pound instead of the US dollar.
Tarek El Molla, Chairman of the Egyptian General Petroleum Corporation (EGPC), said that private airlines’ request was denied, despite their using the Egyptian pound as payment for a year, as the burden of import does not enable the ministry to continue using the Egyptian currency.
The private airlines union has requested from the Ministry of Petroleum by the EGPC, to let them continue paying for flight fuel in Egyptian pounds for the next period.
Yousry Abdel Wahab, vice head of the union and CEO of Nile Air said in earlier statements that the ministry should take into account the rise in the dollar’s exchange rate against the pound. He added that there should be a return to the policy of accepting payment for fuel in Egyptian pounds.
The union submitted a proposal to the Central Bank of Egypt (CBE), which includes the provision of dollar prices officially announced, according to Abdel Wahab. This would occur instead of looking for dollars on the black market, in which the price sometimes reaches EGP 8 to the dollar.
El Molla pointed out that the EGPC imports fuel shipments in dollars and always needs to save currency for the payment of the value of the contracts for clients. The airlines pay for fuel in all the countries they fly to in dollars, and they have not objected to this so far.
He mentioned that the Ministry of Petroleum allowed private airlines to pay for fuel in Egyptian pounds throughout 2014, in consideration of Egypt’s economic situation.
El Molla added, however, that the airlines will not be able to continue doing so due to the increasing exchange rates.
Hassan Aziz, head of the union and chairman of AlMasria Universal Airlines, said that fuel represents about 40% of each flight’s cost. He pointed out that the fuel price per tonne was up to $1,400, and after the global decrease in fuel prices, the price per tonne became $900 on average. This means saving $500 per tonne, but this reduction in prices has not yet been applied within Egyptian airports.
He pointed out that all expenses incurred by the Egyptian companies are being paid in dollars. This includes flight fuel, which increases the companies’ burden because of the exchange rate of the dollar reaching EGP 8 on the black market.
