CABINET WATCH- The Madbouly Cabinet gave the Oil Ministry the greenlight to sign fuel hedging contracts with international banks at its weekly meeting yesterday. We had heard that seven offers were already on the table and under review from institutions looking to provide Egypt with fuel hedging solutions to prevent higher oil prices from further straining the state budget, which assumes an average price of USD 67/bbl. Brent crude prices had climbed to highs of over USD 80/bbl in May. OPEC and non-OPEC member states agreed last month to increase oil output as of July by 1 mn bpd, a move widely expected to ease upward pressure on prices, which have now retreated to around USD 68-70/bbl. Sources said the ministry was after 2-3 year contracts and that the government was also considering hedging against global wheat price fluctuations.

Also yesterday, the Madbouly Cabinet signed off on Egypt’s agreement with Russia to establish the USD 7 bn Russian Industrial Zone (RIZ). Contracts for the development of the RIZ were signed back in May and officials had said last month that they expect to announce progress soon, with talks already ongoing with companies including Volkswagen and Toyota to set up shop, in addition to a number of Russian investors who had come to Cairo earlier this year to explore available opportunities.