The declining oil prices are positive for the Egyptian economy, according to a statement issued by Egypt’s Citadel (Qalaa) Holding on Thursday.
Citadel added that the decline in oil prices would lead to a decline in the budget deficit and the balance of payments in Egypt by at least $5.5bn.
“This value can be increased with the lowering of prices of other goods, which will contribute to a healthy economic environment in Egypt,” the statement said.
The decline in oil prices, currently standing at between $40 and $65 a barrel, has had a positive impact on the company’s activities in all sectors, including energy, cement industries, and transportations and logistics.
The company said that the earnings of one of its companies, the Egyptian Refining Company’s (ERC), are associated with the price difference between mazut, diesel, and jet fuel. The difference is currently $250-$300, despite being $200 when the company’s energy project started.
The project is expected to achieve earnings totalling $700m in its first year after it is completed in 2017, according to Citadel.
Citadel further expected mazut to become available after the decline in oil prices, enabling the Egyptian government to import more mazut and liquefied natural gas (LNG).
Citadel confirmed that aid from Gulf stated could be affected by the decline in oil prices over time, as Russian tourism may similarly be affected due to the rouble’s weakness.