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Ahmed Fathy • 2017 IFPRI Egypt Seminar Series: Opportunities of Energy Subsidy Reform

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IFPRI Egypt Seminar Series provides a platform for all people striving to identify and implement evidence-based policy solutions that sustainably reduce poverty and end hunger and malnutrition. The series is part of the United States Agency for International Development (USAID) funded project called “Evaluating Impact and Building Capacity” (EIBC) that is implemented by IFPRI.

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Ahmed Fathy • 2017 IFPRI Egypt Seminar Series: Opportunities of Energy Subsidy Reform

  1. 1. CAPMAS IFPRI Egypt Seminar Series Cairo, Feb 27, 2018 1
  2. 2.  CAPMAS compiles Social Accounting Matrices (SAMs) for Egypt in the belief that providing such comprehensive datasets helps evaluating and designing economic policies, such as energy subsidy policy.  The collaboration between CAPMAS and IFPRI started in May 2014 to compile a SAM for 2010/11 in a series of training workshops and an official CAPMAS- IFPRI SAM launch event in June 2016.  The “Energy-focused” 2012/13 SAM presented today was compiled by CAPMAS based on IFPRI’s SAM construction framework  Today’s presentation focuses on the key characteristics of the 2012/13 SAM related to energy. For more info on the SAM construction, please visit CAPMAS or IFPRI Website Introduction 2
  3. 3.  Supply and Use Tables 2012/13 (CAPMAS).  Household Income and Expenditure Survey 2012/13 (CAPMAS)  Annual National Accounts 12/13 (MOP)  BOP 12/13 (CBE)  Final Statement of Government 12/13 (MOF)  Agriculture Bulletins (MOALR)  Energy data (Ministry of Petroleum) 3 A SAM is an accounting framework that captures all transfers and real transactions between sectors and institutions within the Egyptian economy
  4. 4.  Budget deficit 13% of GDP  Energy subsidies 7.4 % of GDP  Import intensity is 18%, export intensity is 10%  High trade deficit, importance of remittances for BOP (7% of GDP)  Government’ Transfers to households 0.3% of GDP
  5. 5.  Electricity, diesel and gas most important for industry and households  Diesel is the most heavily subsidized item and accounts for 41.5% of total subsidy cost  Diesel is almost entirely produced locally, whereas Kerosene and Gasoline 95 is mostly imported Energy use (as % of) Subsidies (as % of) Import intensity (%) Intermediate consumption Household consumption Consumption by sector Total energy subsidies LPG 8.2 8.6 59.3 15.1 26.8 Gasoline 80 8.8 8.2 35.5 9.2 39.1 Gasoline 90/92 10.0 9.4 35.5 10.6 38.4 Gasoline 95 2.3 2.8 0.7 0.1 98.3 Diesel 17.6 16.6 79.1 41.5 0.1 Kerosene 2.0 2.3 0.7 0.0 100.0 Other fuel 10.3 10.3 31.1 9.8 0.1 Electricity 26.4 15.4 8.1 5.3 0.0 Natural gas 14.4 26.5 13.8 8.3 0.0 Total Energy 100.0 100.0 32.7 100.0 13.3
  6. 6. Fuel Electricity Gas Total LPG Gasoline 80 Gasoline 90, 92, 95 Kerosene Other fuel Diesel* Electricity Natural gas Energy Energy consumption/total output (%) Economic sectors Agriculture 0.1 0.1 0.1 0.0 0.1 3.1 0.0 1.1 4.6 Crops and livestock 0.1 0.1 0.1 0.0 0.1 3.3 0.0 1.2 4.8 Forestry 0.0 0.0 0.0 0.0 0.0 0.7 0.0 0.2 1.0 Fishery 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.2 0.6 Industry 0.8 0.8 1.1 0.2 1.0 1.0 3.2 1.6 9.7 Mining 0.3 0.3 0.4 0.1 0.4 0.3 0.0 7.2 8.9 Construction 0.0 0.0 0.0 0.0 0.0 2.3 0.1 0.9 3.4 Other Industry 1.2 1.1 1.5 0.3 1.4 0.9 4.9 0.0 11.3 Services 0.4 0.5 0.8 0.1 0.5 1.1 0.6 0.3 4.3 Trade 0.3 0.3 0.4 0.1 0.4 2.2 0.4 0.6 4.7 Transportation 1.9 3.5 5.2 0.5 3.2 1.9 0.2 0.4 16.8 Other services 0.1 0.1 0.1 0.0 0.1 0.5 0.7 0.1 1.8 0 2 4 6 8 10 12 14 16 18 Energy consumption/total output (%) • Energy as an input plays the most important role for transport, followed by industry, especially mining • In agriculture, energy makes up about 4% of production value
  7. 7. • Urban households tend to spend a higher share on energy than rural HH • Higher income HH tend to spend more on energy than lower income HH 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Energy as % of household consumption Fuel Electricity Gas Total LPG Gasoline 80 Gasoline 90, 92, 95 Kerosene Other fuel Diesel* Electricity Natural gas Energy Fuel consumption/total household consumption (%) Households 1.0 0.9 1.4 0.3 1.2 1.9 1.7 3.0 11.3 Urban 0.7 1.4 1.7 0.1 1.4 2.1 1.8 2.8 12.0 Poor 1.4 0.2 0.3 0.3 0.4 2.6 2.2 3.0 10.3 Medium 0.8 0.8 1.1 0.1 1.0 1.5 2.0 3.9 11.1 High 0.3 2.3 2.8 0.0 2.1 2.5 1.5 1.9 13.3 Rural 1.3 0.5 1.0 0.5 0.9 1.6 1.7 3.2 10.7 Poor 1.7 0.2 0.2 0.6 0.4 0.1 2.0 2.7 7.9 Medium 1.4 0.4 0.8 0.3 0.8 2.7 1.8 2.5 10.6 High 0.9 0.8 1.8 0.6 1.5 1.6 1.3 4.2 12.5
  8. 8.  Because each SAM is built from a broad set of data sources, such data needs to be reconciled (e.g. private consumption data for energy from the Ministry of Petroleum and from HIECS)  The SAM presented represents the most comprehensive energy-focused SAM for Egypt to date  Next steps for CAPMAS National Accounts Team are  Finalizing SUTs 2014/15 which is considered the main data source for the SAM 2014/15  Building the first SAM for Egypt that provides information on economic activities and households at the sub-national level (for 7 Egyptian regions) Conclusion and next steps 8
  9. 9. 9 Thanks pres_capmas@capmas.gov.eg

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