Thursday 09 July 2020
Books – Mostafa Eid:
The government decided, yesterday, Wednesday, to stabilize the current prices of petroleum products in the local market for a period of three months from July to September 2020, after a recommendation from the automatic pricing committee for petroleum products.
According to the decision, the selling price of all three types of gasoline was retained: 6.25 pounds per liter of petrol 80, 7.50 pounds per liter of gasoline 92, 8.50 pounds per liter of gasoline 95, and 6.75 pounds per liter of diesel.
This decision is the fourth for the committee after applying the automatic pricing mechanism on most petroleum products after reaching the cost price in July 2019, after implementing a program to lift support for these products over several years.
The committee’s decision on prices is determined on a quarterly basis, based on the change in the average global prices for Brent crude, and also the change in the exchange rate of the pound during the three months preceding the new price.
The committee said in a statement yesterday, that its recommendations to fix prices came in light of the exceptional conditions that the world is going through as a result of the negative repercussions of the Corona pandemic on global economic activity and oil and energy markets, especially during the period (April / June 2020).
The Committee pointed to the occurrence of sharp fluctuations in world oil prices and the almost complete cessation of the economic activity of many countries of the world in light of the uncertainty that prevailed in that period.
The committee clarified that it had seen the expectations of all international institutions and global expert houses, which expect a significant increase in the prices of Brent crude during the third quarter of 2020 compared to the prices that prevailed in the second quarter of the same year.
She stated that maintaining the prices of selling petroleum products would contribute to maintaining price stability in the local market and avoiding the impact of large fluctuations in world prices.
Beltone Investment Bank said that the government’s decision to stabilize the prices of petroleum products came in line with its expectations, as a result of fluctuating global oil prices, which were affected by several factors that reflect the economic repercussions of the Coffid-19 outbreak.
Beltone pointed out that the Ministry of Finance imposed a development fee of 30 piasters per liter of gasoline and 25 piasters per liter of diesel. Although the development fee will not affect fuel prices, according to the Ministry of Finance, but it represents an increase in the costs borne by the government as a component of the pricing mechanism.
Global oil prices fell to an average of $ 33 a barrel in the second quarter of 2020 compared to $ 51 a barrel in the first quarter of 2020, according to Beltone.
While the Egyptian pound witnessed a slight decline to an average of 15.88 against the dollar in the second quarter of 2020 compared to 15.77 pounds against the dollar in the first quarter of 2020, according to the investment bank.
In the next interactive infographics, Masrawy monitors the four decisions of the automatic pricing committee for petroleum products during the first year of application of the mechanism.