EconSource: Fuel Prices to Triple as Tripoli Removes Subsidies

Libya’s Tripoli-based General National Congress (GNC) has approved plans to remove subsidies for fuel and related products. According to the GNC decision, petrol prices will jump from LD 0.15 per liter to LD 0.45. The changes will not be implemented immediately, as direct payments designed to replace subsidies have yet to be made due to “liquidity shortages.” As part of the reform process, the Tripoli government said each adult would receive LD 50 ($40) per month to assist with the higher prices. It is unclear when the cash payments will be processed or whether the Tripoli-based government has the power to implement the changes nationwide or only in areas nominally under its control. [Libya Monitor (subscription), 11/25/2015]

Israel’s Leviathan signs preliminary natural gas supply deal with Egypt

Natural gas from Israel’s Leviathan offshore gas field will be pumped to Egypt via an existing subsea pipeline for up to fifteen years under a preliminary deal announced by the field’s developers on Wednesday. Leviathan, which is expected to begin production in 2019 or 2020, will supply Egypt’s Dolphinus Holdings with up to 4 billion cubic meters (bcm) of gas per year for ten to fifteen years. The price of gas is linked to the cost of Brent oil and includes a floor price. “We’ve worked with Dolphinus before and we expect to reach a final agreement quickly,” Chief Executive of Israel’s Delek Drilling Yossi Abu said. “The Egyptian market is thirsty for gas, both for domestic use and for their export facilities. There is a lot of room for cooperation there,” he added. Egypt has expressed its eagerness to import Israeli gas despite the discovery by Italy’s Eni of the Zohr gas field off Egypt’s coast in August. Earlier this year, Dolphinus agreed to a seven-year deal to buy at least $1.2 billion of gas from Israel’s Tamar gas field, which is near Leviathan. “Egypt is becoming a regional hub through cooperation with the Leviathan and Tamar partners,” Abu said. [Reuters, 11/25/2015]

Kuwaiti fund to finance Egyptian projects with $1.5 billion
The Kuwait Fund for Arab Economic Development announced plans to allocate $1.5 billion to finance Egyptian projects, particularly projects in the housing sector. The money will be delivered in annual instalments of $300 million over five years, according to the fund’s general director Abdulwahab Ahmed al-Bader. It is not yet clear whether the financing constitutes a loan or a grant. The fund also signed a $95 million loan agreement with Egypt to assist in financing the Egyptian side of a power interconnection project between Egypt and Saudi Arabia. The loan represents 15 percent of the total cost of the Egyptian share of the project and is to be repaid over twenty-five years at 2.5 percent interest rate. [Ahram Online, 11/24/2015]

Turkey’s new finance ministers vows to maintain fiscal discipline as tourism weighs
Turkey will not give up on fiscal discipline in the coming period and parliament will be working intensely on economic reforms, the country’s new Finance Minister Naci Agbal said on Wednesday. Turkey’s new economic administration will need to deal with a number of challenging economic issues. On Tuesday, Turkish tourism representatives voiced concern after Russian Foreign Minister Sergei Lavrov advised Russians not to visit Turkey after Turkish jets downed a Russian plane. “We cannot lose the Russian market, which is the second largest source of Turkey’s tourism sector. We have already lost over 800,000 Russian tourists over this year due to economic woes in [Russia] and had to make significant cuts in hotel prices to overcome our losses in addition to other concessions,” said the head of the Turkish Hoteliers Federation Osman Ayik. [Huriyyet, 11/25/2015]