Finance Minister Ahmed Kouchouk says energy diversification and proactive measures are helping ease pressure on public finances amid rising global oil prices
Egypt has reduced fuel and natural gas consumption by 20% through rationalization measures, while every additional gigawatt of renewable energy capacity could save approximately $250 million in gas imports, Finance Minister Ahmed Kouchouk said on Thursday, highlighting the role of energy diversification in easing pressure on public finances.
Speaking during a session titled “The Energy Journey” on the fourth day of Egypt Forum 2026, Kouchouk said the government was implementing an integrated plan to ensure fiscal sustainability by diversifying the energy mix and taking precautionary measures to mitigate external shocks before they materialize.
The reduction in fuel and natural gas consumption has generated direct savings for the state budget, he said, adding that expanding renewable energy capacity could further lower Egypt’s energy import bill and strengthen the sustainability of public finances.
The measures come as rising international oil prices increase pressure on Egypt’s budget and energy import costs.
Prime Minister Mostafa Madbouly said during the forum that crude oil prices reaching $110 per barrel had left the government with three options: pass the increase on to consumers, absorb the additional cost through the state budget, or reduce imports.
Kouchouk stressed that the government was seeking to manage these pressures through proactive measures, including diversifying energy sources, while maintaining regular payments of dues and avoiding additional burdens on citizens beyond their capacity.
His remarks underscore the fiscal importance of reducing dependence on imported energy, as lower fuel consumption and increased renewable power generation can help contain import costs and limit the impact of external price shocks on public finances.
The government’s approach combines demand-side measures to curb consumption with longer-term efforts to diversify energy sources, strengthen fiscal resilience and shield households from the full impact of international market volatility.
Oil Prices Surge Above $110 Amid Supply Risks
International oil prices have climbed above $110 per barrel amid heightened supply volatility, production disruptions and shipping constraints affecting key energy trade routes.
Brent crude was trading at approximately $112.17 per barrel, while US West Texas Intermediate (WTI) stood at around $99.91.
The International Monetary Fund (IMF) raised its oil price projections, forecasting an average of $95.74 per barrel in 2026, before easing to $87.39 in 2027 as supply and trade conditions gradually normalize, according to the fund’s October 2026 Regional Economic Outlook released on Thursday.
Prices are projected to decline further to $70.46 per barrel by 2031.
However, the outlook remains vulnerable to further disruptions. The IMF’s adverse-risk simulations indicate that a prolonged or more severe disruption to critical trade corridors could push average oil prices toward $130 per barrel, intensifying pressure on energy-importing economies through higher import bills, inflation and increased fiscal costs.
For Egypt, expanding renewable energy capacity and reducing domestic fuel consumption could help mitigate these risks, ease pressure on foreign currency resources and strengthen the government’s ability to manage external economic shocks.
