{"id":622591,"date":"2018-10-08T04:03:43","date_gmt":"2018-10-08T04:03:43","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/"},"modified":"2018-10-08T04:03:43","modified_gmt":"2018-10-08T04:03:43","slug":"with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/","title":{"rendered":"With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-01\"><\/a> ** #1 <strong>EXCLUSIVE- With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all. <\/strong>The cabinet of Prime Minister Mostafa Madbouly is drafting a policy change that would allow the Finance Ministry to move ahead with a hedging strategy to shield the state budget against the rising price of oil and other key commodities, a government source told Enterprise yesterday. The policy would outline options and set the framework through which the finance minister can adopt hedging strategies without further straining the state budget. The policy package would also allow the minister to create a government-affiliated unit that would track commodity prices as part of the hedging strategy.<\/p>\n<p><strong>Global oil prices rose at a much faster pace than the government initially expected, <\/strong>the source also told us. Finance Minister Mohamed Maait <a href=\"https:\/\/enterprise.press\/stories\/2018\/09\/26\/shrugging-off-rising-oil-prices-the-finance-ministry-shelves-its-fuel-hedging-plan\/\">had said last month<\/a> that plans to sign fuel hedging contracts with global banks, widely believed to be JP Morgan and Citibank, had been temporarily shelved and would be killed entirely if global oil prices were to stabilize. <a href=\"https:\/\/enterprise.press\/stories\/2018\/10\/04\/fuel-subsidy-bill-could-overshoot-to-egp-100-bn-in-fy2018-19\/\">Last week<\/a>, however, sources told us that government is now expecting its fuel subsidy bill for FY2018-19 to jump to EGP 100 bn, up from an initial projection of EGP 89 bn, after Brent crude prices surged beyond the USD 80\/bbl mark to reach a four-year high.<\/p>\n<p><strong>Deficit reduction target under pressure: <\/strong><a href=\"https:\/\/enterprise.press\/stories\/2018\/10\/03\/global-oil-rally-threatens-to-derail-budget-deficit-change-inflation-outlook\/\">According to Bloomberg<\/a>, every USD 1 increase above the budgeted oil price of USD 67\/bbl adds EGP 4 bn (USD 222 mn) to the state\u2019s annual outlay, possibly preventing the government from hitting its budget deficit target of 8.4% for the fiscal year. A government source had told us earlier this month that the gap is likely to come in at something closer to 8.6%. All of this comes as some analysts are tipping crude to break the USD 100\/bbl mark amid a US-driven ban on Iranian oil.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>** #1 EXCLUSIVE- With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all. The cabinet of Prime Minister Mostafa Madbouly is drafting a policy change that would allow the Finance Ministry to move ahead with a hedging strategy to shield the state budget against the rising [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8572],"tags":[72,2380],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-622591","post","type-post","status-publish","format-standard","hentry","category-speed-round","tag-enterpriseam","tag-speed-round","wpautop","entry"],"acf":{"mongo_id":"09f5baf2-4198-484f-9678-0411ff08886c","order":"0","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[622584],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all\" \/>\n<meta property=\"og:description\" content=\"** #1 EXCLUSIVE- With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all. The cabinet of Prime Minister Mostafa Madbouly is drafting a policy change that would allow the Finance Ministry to move ahead with a hedging strategy to shield the state budget against the rising [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2018-10-08T04:03:43+00:00\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all\",\"datePublished\":\"2018-10-08T04:03:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/\"},\"wordCount\":329,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"keywords\":[\"EnterpriseAM\",\"SPEED ROUND\"],\"articleSection\":[\"Speed Round\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2018\/10\/08\/with-the-price-of-oil-stubbornly-high-the-madbouly-government-may-be-looking-at-a-fuel-hedge-after-all\/\",\"name\":\"With the price of oil stubbornly high, the Madbouly government may be looking at a fuel hedge after all - 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The government\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/10\/104.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":596528,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/07\/01\/egypt-plans-fuel-hedging-for-fy2019-2020-confirms-hedging-took-place-in-fy2018-19\/","url_meta":{"origin":622591,"position":2},"title":"Egypt plans fuel hedging for FY2019-2020, confirms hedging took place in FY2018-19","author":"enterpriseam admin","date":"1 July 2019","format":false,"excerpt":"Government plans fuel hedging for FY2019-2020, confirms hedging took place in FY2018-2019: Egypt is planning to hedge against rising oil prices for the second year in a row, Finance Minister Mohamed Maait said in an interview last week, Bloomberg reports. This comes two weeks after a government source told the\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/1\/661.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":578518,"url":"https:\/\/enterpriseam.com\/egypt\/2023\/01\/03\/egypt-set-to-hedge-against-rising-oil-prices\/","url_meta":{"origin":622591,"position":3},"title":"Egypt set to hedge against rising oil prices","author":"enterpriseam admin","date":"3 January 2023","format":false,"excerpt":"The Madbouly government agreed in December to purchase hedging contracts to guard against volatility in the oil markets, Bloomberg Asharq reported yesterday, citing two government sources. \u201cThe oil and finance ministries are waiting for the appropriate timing to contract and implement hedging contracts,\u201d one of the sources told the news\u2026","rel":"","context":"In &quot;Energy&quot;","block_context":{"text":"Energy","link":"https:\/\/enterpriseam.com\/egypt\/category\/industries\/energy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2023\/1\/36.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":595781,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/08\/06\/government-seeking-to-increase-oil-hedging-contracts-this-fiscal-year\/","url_meta":{"origin":622591,"position":4},"title":"Government seeking to increase oil hedging contracts this fiscal year","author":"enterpriseam admin","date":"6 August 2019","format":false,"excerpt":"EXCLUSIVE- Gov\u2019t mulls signing fuel hedging contracts with more banks this fiscal year: The government is planning to at least double the number of oil hedging contracts it will sign for FY2019-2020 and is currently reviewing bids from several banks, two government officials told Enterprise. The government will sign up\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":569160,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/02\/16\/egypt-hedged-against-rising-oil-prices-this-year-maait-confirms\/","url_meta":{"origin":622591,"position":5},"title":"Egypt hedged against rising oil prices this year, Maait confirms","author":"enterpriseam admin","date":"16 February 2020","format":false,"excerpt":"Egypt hedged against rising oil prices this year, Maait confirms: Egypt took out hedging contracts to guard against rising oil prices during the current fiscal year, Finance Minister Mohamed Maait confirmed in an interview with Bloomberg. 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