FOR THE FIRST time in 13 years, fuel prices have increased by 30 per cent on the eve of a three-day holiday commemorating the 23 July Revolution. Regular gasoline 90-octane fuel went from LE1 to LE1.30 per litre. Meanwhile, the price of 80-octane gasoline and the higher quality 92-octane remained unchanged, sold for LE0.9 and LE1.4 respectively. Diesel is still heavily subsidised as it is sold at LE0.75, below the cost of production. Notably, the move represents a shift in the government's policy regarding the issue of heavily subsidising fuel products. According to Sameh Fahmi, minister of petroleum, the bill for subsidised oil products for 2006 has hit LE48 billion. "Nevertheless, the prices of fuel in Egypt are still low as they remain way below international rates," said Fahmi. As the world's sixth largest gas exporter, Egypt continues to provide international markets with Liquefied Natural Gas (LNG). Through the Arab pipe, LNG presently goes to Jordan and will soon be extended to Syria and Lebanon. Plans to send gas to Turkey are still under discussion. Once concluded, Egyptian LNG could have an easier access to Europe. Of course, the two LNG hubs in Damietta and Edku on the Mediterranean, export to markets in the USA, Europe and Asia. Egypt's exports of natural gas started in 2003. Since the late 1990s, proven gas reserves have almost doubled from some 36 trillion cubic feet (tcf) in 1998-1999 to 67 tcf in 2004, which roughly stands for almost one per cent of the total global reserves. The use of Compressed Natural Gas (CNG) in vehicles, particularly private taxis, is thriving. Some 70,000 cars, which constitute around two per cent of the country's total fleet, have shifted to this more environment-friendly source of energy. Around 105 filling stations are spread along the country and the number of vehicles turning to CNG is expected to increase substantially in the next 10 years. A wealth of natural gas resources is paving the way for a thriving petrochemical industry. According to Abdallah Ghorab, first under-secretary at the Ministry of Petroleum, the total production capacity was estimated at 510,000 tonnes, generating some $310 million in revenues in 2003. "The capacity has increased to about 550,000 tonnes annually, making the sector one of the important earners of hard currency," said Ghorab who added that a few years ago, Egypt relied heavily on importing petrochemicals. In 2002, the Egyptian Petrochemicals Holding Company (ECHEM) was established with the aim of expanding the sector. A 20-year master plan has been set to build 14 petrochemical complexes along the country. On the oil front, no major discoveries have been made recently to boost the country's proven reserves. During 2006, about 20 new blocs were offered to international companies for exploration. However, most of the reserves are believed to be located in deep underwater, a fact that raises exploration costs dramatically. In 2006, Egypt's production was estimated at slightly above 552,000 bpd (barrels per day), of which Egypt exports about 125,000 bpd. The output has dropped from a peak of 922,000 bpd in 1996. According to Emerging Egypt 2007, "revenues from oil and gas exports reached $6.7 billion in 2004-2005 and was projected to increase by 4.5 per cent to $7 billion in 2005-2006. Including petrochemical products, the sector accounted for some 55 per cent of total exports during the first half of 2005-2006."
