End of month discounts IN AN ATTEMPT to control the prices of basic food stuffs, Mohamed Abu Shadi, minister of supply and internal trade, has decided to sell food items at discounted prices in government cooperatives during the last 10 days of each month. This system was successfully applied in July, and Abu Shadi has now announced that it will be applied each month. A discount of between 10 and 25 per cent will be applied on 25 items, including rice, tea, cooking oil and sugar, during these ten-day periods. The move is in line with calls by experts to use the cooperatives to distribute basic food items at reasonable prices in order to help poorer people and control prices. The ministry is also considering a new system that would allow ration-card beneficiaries, estimated to include 18 million families, to receive food products from supermarkets. The ration-cards system provides monthly quotas of food for each citizen that can be had from small grocery outlets. Loopholes in the system have given some outlet owners the opportunity to sell products on the black market to gain further profits. The new system allows a ration-card holder to buy items other than those distributed on the cards, provided that these are equivalent to the subsidised goods. According to the new system, expected to be presented to the cabinet next month, families will be free to decide whether to receive their goods from supermarkets or regular grocery outlets. Whopping FDI increase THE VALUE of net Foreign Direct Investments (FDI) directed to Egypt jumped to LE1.07 billion during the third quarter of 2012/13 marking a huge 417 per cent increase over its level in the same period of the previous year. The figures released on Tuesday by the Central Bank of Egypt (CBE) showed that while investment inflows to the country declined by 12.4 per cent during the quarter, the value of foreign investments leaving the country nearly halved, falling from $2.27 billion to $1.08 billion. As a whole, net FDI in the first nine months of the 2012/13 fiscal year, beginning in July 2012, reached $1.3 billion. According to the CBE data, the hike in inflows from Arab nations made up for a decline in the FDIs from both the US and the EU. FDI flowing from Arab countries rose by 93.4 per cent in Q3 of 2012/13 to reach $601.6 million. Direct investment from the US contracted by some 20 per cent to $445.5 million in the same quarter . Meanwhile, that from the EU shrank by 4.5 per cent to register $954.9 million. The EU was the largest source of FDI in Egypt in recent years, with a $9.5 billion inflow in 2011/12. Apache's tough choice AS A RESULT of the political turbulence Egypt has been witnessing, Apache, a leading oil and gas exploration and production company, said last week that it was assessing the value of its Egyptian interests, which accounted for nearly a fifth of its global oil and gas production and 27 per cent of its revenue last year. While production has not been affected by the violence, Apache's shares have slipped five per cent since 3 July, when former Egyptian president Mohamed Morsi was toppled. Analysts believe the turmoil contributed to the decline. However, selling Apache's substantial oil and natural gas operations in Egypt now could mean that the company would have to accept a price undercut as a result of the political uncertainty. At the end of 2012, about seven per cent of Apache's oil and natural gas assets were in Egypt, worth some $854.1 million. Analysts said it was hard to put a current value on the operations because of the turmoil. British Gas, the international gas and oil producer, also flagged up concerns last month over instability in Egypt and its future investments in the county after it saw a three per cent fall in second-quarter net profit. This dropped to $986 million, compared to $1.2 billion in the first quarter. Apache entered Egypt's oil and gas sector in 1995. Since then, it has invested more than $10 billion in the sector to become the largest US investor in Egypt and the country's largest oil producer. Apache operations handle nearly one out of every three barrels of oil produced in the country. Operations are handled through two joint ventures with the Egyptian state oil companies Khalda Petroleum and Qarun Petroleum. As of August 2012, Apache and its joint-venture companies provided direct employment for 3,700 Egyptians and 5,100 Egyptian contract and casual workers. New head of EGPC MINISTER of Petroleum Sherif Ismail appointed Tarek Al-Molla chairman of the state-run Egyptian General Petroleum Corporation (EGPC) last week. The appointment of Al-Molla, who served as vice chairman for foreign trade at the EGPC, was considered a good sign by foreign oil companies operating in Egypt. Al-Molla replaces Tarek Al-Barkatawi, who was appointed in May. Oil and gas operators have been complaining about confused decision-making in the Egyptian oil sector since the ouster of former president Hosni Mubarak in 2011, a situation which did not improve after Islamist former president Mohamed Morsi assumed power in July 2012. As the new chairman of the EGPC, Al-Molla will have to address numerous challenges, including Egypt's untenable fuel subsidies and billions in debt to foreign companies. The interim government intends to press ahead with a new smart-card system to distribute subsidised petroleum products in order to curb smuggling and better target them. Through the use of the new system, the government hopes to cut energy subsidies by an annual amount of LE3.5 billion, Finance Minister Ahmed Galal said last week The total bill for energy subsidies is targeted to reach some LE100 billion in 2013/14, compared to LE120 billion in 2012/13. Electrolux resumes production AS EVENTS have started to quieten down in Egypt, Electrolux, the world's No. 2 home-appliances maker, has resumed full production, almost two weeks after it suspended its operations due to violence in the country. The Swedish company, which has about 10 factories on the outskirts of Cairo, said that the security situation was more stable, adding that it would still be reassessing developments. Egypt has been ruled by an interim government since last month's ousting of Islamist former president Mohamed Morsi. More than 1,000 people, including about 100 soldiers and police, have died in violence across Egypt during the past month, according to Reuters. The turmoil has caused some multinational firms to suspend their operations in the country, raising fears that two years of economic crisis in Egypt could get worse. Electrolux, which has nearly 7,000 employees in Egypt, told workers to stay at home on 14 August after the authorities imposed a state of emergency in Cairo. The company started limited production again on 18 August. Other international firms that have suspended production in the country include General Motors, German chemicals firm BASF and Apache. Electrolux's turnover in Egypt topped $307 million last year. It bought Egypt's biggest appliances maker Olympic Group in 2011.
