Egypt’s government is forecasting a significant drop in petroleum exports, predicting they will fall to $7.95 billion for the fiscal year 2024-2025, down from $10.22 billion in the previous year.
Economic Challenges Ahead
This expected decline in petroleum exports comes amid broader economic challenges for Egypt. The central bank recently reported a shift in the country’s oil trade balance, with a $5.1 billion deficit in the first nine months of fiscal 2023/24, compared to a $1.7 billion surplus during the same period last year.
Falling Oil and Gas Exports
The report highlights a steep drop in oil exports, which decreased by $7.2 billion to $4.6 billion from July to March. Natural gas exports also fell by $6.2 billion, and oil product exports dropped by $1.2 billion. These declines are happening as Egypt struggles with ongoing power cuts caused by natural gas shortages.
The Impact of Power Shortages
Since last July, many areas in Egypt have been experiencing scheduled two-hour daily power cuts. These outages are due to a combination of reduced gas production, higher domestic demand, and a shortage of foreign currency. These power cuts have affected both households and industries, making it clear that there’s an urgent need to stabilize the energy supply.
Government’s Next Steps
In light of these challenges, the Egyptian government is likely to explore various strategies to mitigate the impact of declining petroleum exports and address power shortages. This could involve efforts to boost foreign currency reserves, improve energy production capabilities, and invest in alternative energy sources.
Looking Forward
The projected decline in petroleum exports for the fiscal year 2024/25 underscores the economic issues Egypt is facing. The government’s strategic planning in the coming months will be crucial to addressing these challenges and ensuring economic stability.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
11tth July, 2024
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