Egypt signs $1.4bn oil products deal with Aramco

Exports are due to begin in September this year

Egypt is seeking to recover from its biggest energy crisis yet.
Egypt is seeking to recover from its biggest energy crisis yet.

Egypt has signed a three-month oil products deal worth $1.4bn with Saudi Aramco, the country's oil minister told Reuters on Thursday.

The exports are due to begin in September and payments will start within a year, Sherif Ismail said.

The deal includes 500,000 tonnes of diesel fuel, 220,000 tonnes of heating oil and 150,000 tonnes of gasoline per month, Ismail added. 

Egypt struck a similar deal with the UAE, when the country agreed to provide Cairo with petroleum products worth $8.7bn. Under the deal, some of the petroleum products would be provided in the form of grants over a one-year period starting in September 2015.

The remainder, it was agreed, would come as a credit agreement that will be repaid in instalments, according to an Egyptian official, Rueters reported.

“We will complete all the details this week and the first shipment will be sent next week,” an official was quoted as saying by the news agency.

Three of the region’s main oil and gas producers, UAE, Saudi Arabia and Kuwait, have together provided Egypt with more than $20bn in grants, loans and petroleum products over the last year, the report said.

“Egypt imports petroleum products worth around $1bn to $1.3bn a month,” the official added.

The total amount of fuel subsidies provided to Egypt up until September last year has been estimated at around $15bn – one fifth of the country’s state budget.

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