The Ministry of Petroleum and Mineral Resources requested that the Electricity Ministry provide an extra EGP 500m per month for the fuel acquired by power stations, in order to reduce the financial burden faced by the Egyptian General Petroleum Corporation (EGPC) to import petroleum products.
A leading official at the EGPC told Daily News Egypt that the Ministry of Electricity owes EGP 76bn for fuel it received by the end of October 2015.
He explained that power plants receive EGP 3.1bn worth of fuel per month. Only EGP 500m were paid and the rest is added to the debt.
The official added that the EGPC took out loans to import fuel to run the power plants, but now there are no more assets to borrow on. He added that the Ministry of Electricity should share the responsibility with the EGPC and provide the necessary liquidity for fuel, oil, diesel and natural gas.
It is of note that the fuel import bill fell back by $550m per month compared with $800m last year, as the result of continued decreases in the price of crude oil which led to the decrease in the value of petroleum derivatives – gasoline, diesel, fuel, oil and butane – which are imported from abroad.
The official also said the EGPC recently received EGP 10bn of dues in the form of a loan for the benefit of the Ministry of Electricity.
He added that the EGPC shouldered EGP 2.7m in interests on the loan that the Ministry of Electricity paid-off as part of its debts.
He pointed out that the value of the loan has been directed to the import ships of petroleum and natural gas and paying part of the dues to foreign partners.
A banking alliance composed of 10 banks, led by the National Bank of Egypt (NBE), has agreed to guarantee the Ministry of Electricity and raise EGP 10bn for the EGPC, after the Ministry of Finance refused to grant the guarantee for the loan.
The alliance includes the NBE, Banque Misr, Banque du Caire, Arab African International Bank, Qatar National Bank, Commercial International Bank, Bank Audi, Ahli United Bank, Arab Bank, and the National Bank of Abu Dhabi (NBAD).