Friday, 18 June 2010
Egypt to restore free zone status to refineries
In what is viewed as an important move to boost the energy sector, the Egyptian parliament has agreed to restore free zone status to oil refineries. The new status is expected to attract foreign investment from international oil companies.
Egypt's government had cancelled oil refiners' free zone status, which gave investors tax breaks, as part of broader changes to its free zone laws in May 2008. The amendments passed on Tuesday 15th June will restore refining companies' exemption from some annual duties, but firms will still pay income tax.
Oil analysts believe the increased costs resulting from the 2008 changes deterred foreign firms, including Kuwait's Al Kharafi Group, from building refineries in Egypt.
The need for refineries is important for Egypt and this new development will contribute to the ever expanding energy sector; along with Egypt's plans to build its largest ever oil refinery with $2billion of Chinese investment to supply the domestic market and export to China.
For more news and expert analysis about Egypt please see Egypt Politics & Security.