EconSource: Russia says Turkey Shot Down Russian plane to Defend Oil Supplies from ISIS

Russian President Vladimir Putin said yesterday that Turkey downed a Russian warplane on November 24 in order to protect oil supplies from the Islamic State (ISIS or ISIL). “We have received additional data which confirm that Islamic State oil … enters the territory of Turkey,” he said. “We have every reason to think that the decision to shoot down our plane was dictated by the desire to protect the oil supply lines to Turkish territory.” Putin added that the decision to shoot down the plane was a “huge mistake.”Turkish President Recep Tayyip Erdogan challenged Putin’s claim, saying, “If you allege something you should prove it.” Erdogan has previously said claims that Turkey buys oil from ISIS are slander. Turkish Prime Minister Ahmet Davutoglu called on Russia to reestablish dialogue with Turkey, rather than make “baseless accusations.” Putin snubbed a request by Erdogan to meet on the sidelines of a UN climate conference near Paris on Monday. [Reuters, BBC, CNN, 11/30/2015]

Algerian parliament approves 2016 budget, energy price increases
Algeria’s parliament on Monday approved increases in prices of domestic gasoline, diesel, gas, and electricity as part of its 2016 budget. This marks the first increase in the subsidized prices of those products in over a decade. Under the new law, gasoline prices will go up by 6 dinars and diesel by 1 dinar. Value-added tax (VAT) on electricity and gas will increase from the current 7 percent to 17 percent. VAT will also be applied to 3G internet services. “The fuel price increase is inevitable,” said Finance Minister Abderrahmane Benkhalfa. The 2016 budget law also calls for a 9 percent cut in spending. The government has already announced delays to some infrastructure projects. Last week it said it would reform its subsidy system over the next few years. Algeria expects its energy earnings to fall 50 percent to $34 billion this year and to $26 billion in 2016. [Reuters, 11/30/2015]

Central Bank of Egypt unable to meet EGPC’s dollar requirements
The Central Bank of Egypt (CBE) is unable to provide the monthly requirement of $700 million to import petroleum materials and natural gas. An official from the Egyptian General Petroleum Corporation (EGPC) said the state gas company requested $700 million per month from the CBE in the second quarter of the current fiscal year to import petroleum materials and natural gas. However, in October the CBE provided only $160 million, which placed pressure on the EGPC to provide the remaining dollar requirements to meet the market’s needs. The official said the CBE told the EGPC that it is unable to provide all the monthly dollar requirements due to pressure on foreign currency reserves and Egypt’s credit rating. Meanwhile, the Federation of Egyptian Banks (FEB) on Monday rejected the Egyptian Tax Authority’s effort to register a value-added tax (VAT). A source said that the FEB drafted a memorandum detailing the banks’ rejection of the VAT registration and submitted it to new CBE Governor Tarek Amer. [DNE, 11/30/2015]

Qatar launches $5.5 billion, five-year loan into syndication
The government of Qatar has invited banks to provide it with a $5.5 billion loan, as Doha becomes the latest Gulf government to seek funds as low energy prices pressure its finances. The five-year loan is smaller than the amount of up to $10 billion that bankers last month said the government aimed to borrow. The loan will temporarily reduce the government’s domestic borrowing and relieve upward pressure on local money market rates. The Qatari riyal fell sharply in the forward foreign exchange market last week as traders worried that Doha might have trouble agreeing with banks on the terms of the loan. Marketing of the loan deal will close in the third week of December. The transaction is being arranged by Bank of Tokyo-Mitsubishi UFJ, Mizuho, Sumitomo Mitsui Banking Corp, Deutsche Bank, Barclays, and Qatar National Bank. [Reuters, 12/1/2015]

Tunisia seeks to create agency to manage the country’s debt
Tunisia’s Finance Ministry is seeking to create an agency to manage the country’s debt, Finance Minister Slim Chaker said Monday. Chaker said the state budget will see a rise in debt servicing in 2017 and 2018, but he noted that foreign debt servicing is expected to decrease by 2021. Chaker also said the government is working to reduce the cost of domestic and foreign debt and direct foreign debt to financing investment and development. Meanwhile, Chaker said Tunisia’s Finance Ministry has completed reforms related to the management of three public banks that required a recapitalization of MTD 650 million. He also said that state revenues from the sale of seized companies will be significant in 2016, but he did not provide further details about the value of the sales. [TAP, 11/30/2015]

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