Ministry: UAE to provide Egypt $9 bln in oil products

Egypt’s oil ministry said on Sunday that the United Arab Emirates would provide “about $9 billion” worth of petroleum products to Egypt over the next year in deal to come into effect on Monday.

Ministry spokesman Hamdy Abdelaziz said in a statement that the contract between state-run Egyptian General Petroleum Company (EGPC) and its counterpart, Abu Dhabi National Oil Company, would contribute to meeting part of Egypt’s petroleum needs over the next year.

Egypt has struggled to curb its swelling budget deficit and meet its soaring energy demands, which have resulted in daily electricity cuts around the country of 86 million people.

Oil-producing Gulf countries have come to Egypt’s aid since the army, prompted by mass protests, ousted Islamist President Mohammed Mursi last year.

An Egyptian official told Reuters earlier on Sunday that the UAE would provide Egypt with petroleum products worth $8.7 billion over a one-year period starting in September.

The official told Reuters that the first shipment of petroleum would be sent next week.

He said some of the petroleum products would comes as grants and the remainder under a credit agreement that would be repaid in installments.

The United Arab Emirates, Saudi Arabia and Kuwait have together provided Egypt with more than $20 billion in grants, loans and petroleum products since Mursi’s overthrow.

Fuel subsidies have in recent years cost Egypt’s government around $15 billion a year, a fifth of the state budget. But the government slashed energy subsidies and increased prices by more than 70 percent in July.

The official said Egypt imports petroleum products worth around $1 billion to $1.3 billion a month.