Energy subsidies might be cut in Egypt

Subsidies for energy-intensive industries may be cut, according to the international cooperation minister, Fayza Abul-Naga. The cabinet has approved a plan to cut the subsidies as part of an austerity plan to reduce the budget deficit by LE20 billion ($3.3 billion), but a final decision will need the approval of the ruling military junta (SCAF),  a source at the finance ministry told Ahram Online. “A final decision will be taken within a few days,” said the source. The plan was announced last week but no specific details were given.  Recent official estimates expect the budget deficit in the current fiscal year to reach LE160 billion ($26.58 billion) compared to previous estimates of LE134 billion ($22.3 billion).   Abul-Naga, known to be close to the military, also said a new tax on properties worth more than LE1 million would be postponed for one year and won’t be applied in January 2012 as originally planned – a decision some economists have said would favour the wealthiest in society.