CAIRO: Egypt will keep 95-octane petrol at 7.75 Egyptian pounds ($0.4485) per liter through the second quarter of 2019 as it links the cost to international fuel prices for the first time, the petroleum ministry said in a statement.
Egypt had committed to the indexation mechanism as part of reforms tied to a $12 billion International Monetary Fund program and designed to increase energy prices to match those on international markets.
A committee decided to hold 95-octane petrol’s price based on the Egyptian pound’s appreciation against the dollar and global prices of Brent crude, the ministry said.
“There has been an uptick in inflation and the government has just issued a decision to increase the minimum state salaries,” said Angus Blair, chief operating officer at Cairo-based investment bank Pharos Holding.
“It may have decided to defer any increase until inflation comes off a little further, as inflation is on a longer-term downtrend, and the state employees are paid the new salaries. I would now expect fuel price increases in July or August.”
As part of the IMF deal, Egypt has been pushing ahead with tough economic reforms that have strained the budgets of tens of millions of citizens.
They included the introduction of a value-added tax, a currency devaluation and deep cuts to energy subsidies that included a hike in petrol prices of up to 50 percent last June.
About $10 billion has now been disbursed under the deal, with a final tranche due after another review in June.
The petroleum minister had said in January that Egypt would implement the automatic price indexation mechanism on 95-octane petrol starting in April.
The IMF cited those promised changes in a statement last month, saying: “The authorities remain committed to reaching cost recovery for most fuel products by mid-2019 and implementing automatic fuel price indexation.” ($1 = 17.2800 Egyptian pounds)
Egypt holds price of 95-octane petrol through Q2 — ministry
Egypt holds price of 95-octane petrol through Q2 — ministry
- 95-octane petrol will remain at 7.75 Egyptian pounds ($0.4485) per liter through the second quarter of 2019
European gas prices soar almost 50% as Iran conflict halts Qatar LNG output
- Analysts warn prolonged disruption could push prices higher
- Some shipments of oil, LNG through Strait of Hormuz suspended
- Benchmark Asian LNG price up almost 39 percent
LONDON: Benchmark Dutch and British wholesale gas prices soared by almost 50 percent on Monday, after major liquefied natural gas exporter Qatar Energy said it had halted production due to attacks in the Middle East.
Qatar, soon to cement its role as the world’s second largest LNG exporter after the US, plays a major role in balancing both Asian and European markets’ demand of LNG.
Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway.
Europe has increased imports of LNG over the past few years as it seeks to phase out Russian gas following Russia’s invasion of Ukraine.
Around 20 percent of the world’s LNG transits through the Strait of Hormuz and a prolonged suspension or full closure would increase global competition for other sources of the gas, driving up prices internationally.
“Disruptions to LNG flows would reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, vice president, gas and LNG research at Wood Mackenzie.
The Dutch front-month contract at the TTF hub, seen as a benchmark price for Europe, was up €14.56 at €46.52 per megawatt hour, or around $15.92/mmBtu, by 12:55 p.m. GMT, ICE data showed.
Prices were already some 25 percent higher earlier in the day but extended gains after QatarEnergy’s production halt.
Benchmark Asian LNG prices jumped almost 39 percent on Monday morning with the S&P Global Energy Japan-Korea-Marker, widely used as an Asian LNG benchmark, at $15.068 per million British thermal units, Platts data showed.
“If LNG/gas markets start to price in an extended period of losses to Qatari LNG supply, TTF could potentially spike to 80-100 euros/MWh ($28-35/mmBtu),” Warren Patterson, head of commodities strategy at ING, said. The British April contract was up 40.83 pence at 119.40 pence per therm, ICE data showed.
Europe is also relying on LNG imports to help fill its gas storage sites which have been depleted over the winter and are currently around 30 percent full, the latest data from Gas Infrastructure Europe showed. In the European carbon market, the benchmark contract was down €1.10 at €69.17 a tonne
