Egypt to pay $1.3B oil debt by June amid energy crunch

Egypt said it will pay $1.3 billion in overdue payments to international oil companies by June, accelerating its earlier repayment plan as it seeks to stabilize its energy sector.

The country had accumulated around $6.1 billion in arrears by mid-2024, largely due to a prolonged foreign currency shortage that delayed payments and discouraged investment. Although the situation has improved, some companies say debts have started to build again, News.Az reports, citing Reuters.

Officials hope clearing the backlog will encourage foreign firms to resume drilling and exploration, helping reverse a decline in domestic oil and gas production since its peak in 2021. Increased local output could also reduce Egypt’s reliance on costly energy imports.

Rising global energy prices have added pressure. Egypt’s energy import bill has more than doubled, prompting the government to consider energy-saving measures, including shorter business hours and expanded remote work for public employees.

Analysts warn that higher oil costs could raise government spending by up to 0.55% of GDP, posing an additional challenge as Egypt’s economy continues to recover from recent shocks.

News.Az 

By Aysel Mammadzada