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Modai Reports Egypt Raises Price of Oil from $18 to $32 a Barrel

July 19, 1979
See Original Daily Bulletin From This Date

Energy Minister Yitzhak Modai informed the Knesset’s Economic Committee late yesterday that Egypt has just raised the price of its oil to about $32 per barrel, up from $18.50. He said the new price corresponded more or less to the spot market price at Rotterdam and indicated that Cairo may use it as a bargaining point in political negotiations with Israel.

When Premier Menachem Begin returned from his summit meeting with President Anwar Sadat in Alexandria last week, he announced a promise by the Egyptian leader to make Sinai oil available to Israel at the world market price after Nov. 26 when Israel hands over the Alma oilfields in western Sinai to Egypt. They are the last oilfields held by Israel in Sinai and, according to Modai’s estimate, once they are relinquished, Israel will be dependent on foreign sources for 98 percent of its oil needs of approximately eight million tons annually.

Modai said he was gratified that the agreement with Egypt at least provides for the sale of oil to Israel- “on a continuous basis.” Meanwhile, gasoline lines formed all over Israel last night in anticipation of a major price increase. Motorists rushed to fill their tanks after learning that the Cabinet had gone into emergency session to discuss economic policy which could mean an imminent end to price subsidies on basic commodities including fuel. (See related story P.3)

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