By Nasser Yousseff
A representative from the National Bank of Egypt stated on Monday that the bank had agreed to provide $65m (EGP 455m) worth of credit to the Egyptian General Petroleum Company (EGPC), in order to fund the import of diesel fuel and gasoline shipments.
He added that the funds will be used to pay retailers and companies importing fuel, in order to ensure that another energy crisis does not strike Egypt, adding that Egypt consumes nearly 38,000 tons of diesel fuel per day, importing 22,000 tons from abroad. The country also consumes a total of 16,000 tons of gasoline per day, importing nearly 15% of this amount from abroad.
He added that the National Bank of Egypt was currently negotiating with banks to boost letters of credit available on the Egyptian market to $262m for the purpose of purchasing crude oil from Libya and Kuwait. This move comes after both countries requested that the number of such letters available on the market be increased, due to political developments within Egypt.
The bank’s board of directors recently granted the EGPC $1bn in letters of credit for the purpose of importing 600,000 barrels of crude oil per month from Libya, after receiving a guarantee from the country’s Ministry of Finance.
Khalid Hisham, chairman of the petroleum sector within the National Bank of Egypt, stated that last Thursday the bank released its first batch of letters of credit, worth upwards of $77m, for the purpose of importing Libyan oil. The country’s Ministry of Finance pledged the same amount only in Egyptian currency.
The National Bank of Egypt is considered one of the largest funders of Egypt’s petroleum sector, with its portfolio totalling EGP 23bn by the end of April 2013. This portfolio includes cases of direct grants and common shares of bank loans, of which the bank itself partially subscribes to, in addition to letters of credit and guarantee.
Translated from Al-Borsa