I didn’t truly grasp the severity of the issue surrounding the delayed payments owed to foreign partners by the petroleum sector until I read an article by petroleum expert and former Deputy Chairman of the Egyptian General Petroleum Corporation, Salah Hafez.
His piece, titled ‘The Petroleum System: The Heart of the State Groans Silently,’ was published in Al-Masry Al-Youm newspaper on April 13. This prominent petroleum expert strongly sounded the alarm, warning of the long-term catastrophic and devastating consequences if this issue persists. This prompted me to write my own article in the same newspaper last Friday, titled ‘Foreign Dues, A Grave Oversight,’ where I pointed out that the problem has become chronic.
For over a decade, successive petroleum ministers have promised timely payments, yet seemingly nothing changes.
The evidence of this is that Prime Minister Mostafa Madbouly discussed the issue in a ministerial meeting just mid-April.
Immediately after my article was published, I received numerous responses criticizing the delays and urging a decisive resolution to the issue instead of damaging and endless procrastination. Hafez himself sent a message outlining what he described as ‘some clarifications on the seriousness of the situation.’ He stated that there are alarming repercussions within the energy system, which is the engine of all state activities and responsibilities.
These repercussions include a worsening deficit in the balance of payments due to the increased need for dollars, the necessity of importing what we lose from our free share of oil companies’ production because of unpaid dues, and the burdening of the budget with new costs to subsidize fuel, part of which we obtain from abroad in dollars.
He emphasized that this is a very serious and worrying matter for our future, not to mention other qualitative crises that are causing damage to Egypt’s standing. The country’s debts in general are increasing; some provide a near-term return, while others support development projects that might yield a long-term return.
However, the energy debt is a double-edged sword and is spoiling a system that was once the best in Egypt.
While this debt might be better than any other investment, the continued pursuit of it must be conditional on completely ending the subsidy issue.
Without getting into the complex technical details that are beyond my understanding as a non-expert in the field, I have some straightforward and direct questions: What is the current status of repaying the overdue amounts owed to our foreign partners? Are payments actually being made, or are we still just hearing promises and commitments? Is Egypt incurring penalties due to these delays, and if so, what is the total cost? And what exactly is the total sum of outstanding dues that the petroleum sector owes these partners?
These are questions that only the Prime Minister can truly answer, and most of them simply require a yes or no response.
The ongoing drain on Egypt’s treasury from paying millions of dollars to import the petroleum products we need – products that local production can’t cover – is making Egypt’s economic and financial problems worse. At a time when the government’s general direction is to reduce imports to the lowest possible level to protect Egypt’s foreign currency reserves from being negatively impacted, decisively settling the issue of outstanding payments and announcing a complete end to this problem would finally close an unpleasant chapter that should have been concluded many years ago.
Author’s bio
Abdel Allah Abdel Salam is the managing editor at Al-Ahram newspaper where he writes a daily column titled “New Horizon”. He holds a Bachelor’s degree in Journalism from the Faculty of Mass Communication, Cairo University (1987).
He began his journalistic career at Al-Wafd newspaper, then moved to the Middle East News Agency, before settling at Al-Ahram newspaper in June 1991. He founded the Al-Ahram electronic portal and served as its editor-in-chief from 2010 to 2013.
He held the position of executive editor-in-chief of the Al-Masry Al-Youm website in 2013.
Salam has also worked as managing editor of the Al Ain (UAE) portal in 2016, and managing editor of the “Al-Watan” (Egyptian) newspaper’s website in 2017.
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