Back to the complete issue
Sunday, 16 June 2019

Egypt looking at USD 65-70/bbl in fuel hedge set to take effect in July

Gov’t looking at USD 65-70/bbl in fuel hedge contracts set to take effect in July: The finance and oil ministries have started renegotiating the USD 70/bbl price they had agreed on under fuel hedging contracts set to take effect next month, a government source told the local press. The government will be looking to lock the price of crude in at between USD 65-70/bbl in its contract with JP Morgan and Citibank.

Where are oil prices now? Crude has hovered below the USD 70 mark for the better part of the current fiscal year. Bloomberg’s Brent index averaged at USD 67.46 in the past 52 weeks, close to the USD 68 / bbl used in the government’s draft FY2019-2020 state budget (pdf).

Background: We noted earlier this year that the government was set to to hedge against volatility in the price of fuel, imported wheat and cooking oil, after OPEC production cuts caused prices to jump well above the budgeted estimates last year. The contracts take effect in FY2019-2020 to help ensure Egypt meets its budget deficit target.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.