Bearish Oil Prices Caused Transfers to EDL to Decrease by August 2015
According to the Ministry of Finance, transfers to EDL reached $787.34M for the first 8 months of 2015, substantially lower than the $1.47B transferred over the same period in 2014.
This decline mainly resulted from the 44.7% yearly decrease in payments to fuel and oil gas suppliers KPC and Sonatrach, which reached $770.18M by August 2015. This decrease can be observed from two viewpoints; on the quantity side, the amount of fuel oil imported decreased by a yearly 14.54%, which more than offset the 4.49% drop in gas imports. From a price perspective, the decrease in payments goes back to the 47.4% yearly plunge in the average price of crude oil from $107.21/barrel by August 2014 to $56.39/barrel, by August 2015.
Furthermore, EDL’s contribution to the oil bill increased to 2.8% over the same period, up from its previous share of 2.0% in the period January-August 2014.
Out of the government’s primary expenditures, which reached $5.80B in the period Jan-Aug 2015, EDL transfers represented a share of 13.6% compared to a share of 23.4% by August 2014.
Contributions of EDL and MoF in the Oil Bill by August ($M)
Source: MoF
