Petroleum subsidies have risen to EGP 14 bn in 1Q2016-17 after Brent prices crossed the USD 40 per bbl mark that was planned in the state budget, Al Borsa reported. Brent was trading at an average of USD 51 per bbl last week. The government is studying raising fuel prices to reduce the subsidy bill, Oil Minister Tarek El Molla said, but industry insiders say any government action is unlikely to reduce the bill meaningfully as the weakened EGP has already pushed fuel subsidies up. The government has allocated EGP 35 bn this year for fuel subsidies. At this rate the bill by FY2016-17 will reach EGP 56 bn. On a related note, There is still no word from Aramco when and if it plans to send in its fuel shipments for November, said El Molla. In the meantime, FX-strapped Egypt will continue to buy fuel from other sources, he tells the newspaper. We noted last week that Egypt had reached an agreement with Kuwait on fuel shipments which will not include preferential terms, facilities, discounts or grants. Since May, Aramco had delivered USD 1.2 bn worth of petroleum products, El Molla noted.

On the production side, EGPC is projecting that the production of crude oil and condensates will increase to 705k bbl/d from the current 690k bbl/d by the end of FY 2016-17, Al Mal reported.