CAIRO: Minister of Petroleum Sameh Fahmy said on Wednesday that the cost of buying oil and natural gas from foreign partners has increased sevenfold over the past ten years, citing an international upsurge in energy prices as the main reason behind the increase. He pointed out that the government paid as much as $5.7 billion to foreign companies in 2006 compared with only $800 million in 1996 as a result of increasing energy prices, noting that energy prices in the domestic market remained very stable despite currency depreciation.
During his meeting with members of the British Egyptian Business Association in Cairo, the minister admitted that such increases in energy cost pose a considerable challenge to the petroleum sector and add pressures on the balance of payment.
In its fiscal 2006-07 budget, the government had allocated as much as LE 40 billion in subsidies to oil products, financed by the financial surplus generated by the petroleum sector, against LE 22.1 billion in subsidies a year earlier.
Ibrahim Saleh, former chairman of the General Authority of Petroleum, expected the bill of oil purchases from foreign partners to increase to LE 42 billion in view of rising international crude prices.
The government provides lucrative facilities to international energy companies in concessions for exploration areas to boost gas and oil exploration in Egypt.
