Egypt has cut its budget for petroleum project subsidies to £E61bn ($8bn) in its draft budget for 2015/16, according to a statement by Tarek El-Molla, chairman of state-run Egyptian General Petroleum Corporation (EGPC).

The new draft budget is 39 per cent less than the £E100bn that was allocated to fuel subsidies for 2014/15.

Egypt is on track to spend just £E70bn of the £E100bn that was allocated to fuel subsidies for the current financial year, according to the EGPC statement released on 20 June.

The 50 per cent drop in global oil prices over the second half of 2014 is partly responsible for reduced spending on subsidies.

Government policy has also helped to reduce spending on subsidies.

Fuel subsidies were cut by 30 per cent in July 2014, increasing the price of some fuels by as much as 80 per cent.

Egypt has pledged to end all fuel subsidies by 2020 and use the savings to spend more on health and education.