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The socio-economic impact of Impact of

COVID-19 on
COVID-19 on the petroleum sector the petroleum
sector
in Egypt: a descriptive analysis
Kholoud M. AbdelMaksoud and Heba M.R. Hathout 21
Natural Resources, Cairo University, Cairo, Egypt, and
Received 22 October 2020
Samar H. Albagoury Revised 6 March 2021
Economics, Cairo University, Cairo, Egypt 27 May 2021
Accepted 16 August 2021

Abstract
Purpose – This study explored the impact of COVID-19 on the petroleum sector in Egypt, both economically
and socially. Of all sectors of the economy, the oil industry has been one of the most negatively impacted by the
pandemic, with oil prices plummeting at the start of the pandemic. Use to decrease demand. This paper aimed to
analyse the main economic and social effects of the pandemic on the Egypt oil industry through an examination
of the macroeconomic data reflected in the Egyptian balance of payments, the country’s general budget and the
oil industry’s performance data. The study also conducted a survey of a set of workers from the Egyptian
petroleum sector. The study thus concluded two levels of analysis; a macrolevel and a micro level analysis of
the effect of COVID-19 on the Egyptian oil industry.
Design/methodology/approach – The paper builds upon the experience gained from evaluating market
change caused by COVID-19 (Agosta et al., 2020), to analyse the socioeconomic implications of COVID-19 on the
Egyptian oil industry. This study employed a survey analysis of questionnaires filled by on a sample of
workers in the petroleum sector in Egypt. Data were analysed using the SPSS software, version 18.0.
Descriptive analysis was reported as frequencies and percentages. The macroeconomic impact analysis was
done by analysing macro-economic data pertaining the oil industry’s levels of production as well as the data
pertaining to Egypt’s external balance of payment and public finance.
Findings – The paper concludes that although the COVID-19 pandemic had negatively impacted the
socioeconomics of oil sector workers, reducing their incomes and costing them jobs, these effects appeared to be
short term effects that could be minimised with the end of the pandemic and be mitigated through the adequate
social and economic policies. No permanent socioeconomic losses were thus deemed to be a serious concern
with respect to these workers. The study also concluded that, macroeconomically, lower global oil prices has
had a net positive effect on the Egyptian economy as the causing an expected shrinkage of the overall trade
deficit. It also has reduced the national budget deficit and has helped mobilise money into the economy,
financing both investments and social expenses.
Research limitations/implications – The survey was very hard to reach, where lot of workers in the
petroleum sector (governmental) refused to answer the questions.
Practical implications – Some African countries may not have all the necessary most recent data of economic
indicators needed to ascertain with certainty the economic impact of the COVID-19 pandemic. And, at the event
that data are completely available, analysts must consider that any worsening of the economy may not stem
directly from the pandemic itself. Causality has to be clearly established. The survey therefore focused on the
attitudes and perceptions of oil sector workers, irrespective of whether a given indicator had been affected by the
pandemic or is seen likely to be affected by it in the future. All those responding have reported the belief that
economic indicators, such as GDP growth, inflation and trade had been impacted negatively by the spread of
COVID-19. They also believed the effects of the pandemic on transport to have had direct effects on the oil industry.
Social implications – The social impact of the pandemic was less apparent, particularly among
governmental sector workers compared with those in the private sector. However, freelancers have reported
some issues that may be become more apparent through aggregated data.
Originality/value – This study has presented some preliminary estimates of the impact of the COVID-19
outbreak on petroleum sector in Egypt. The goal was not to be definitive about the virus outbreak, but rather to
provide information about a range of possible economic costs of the disease. While, a detailed quantification of
the socioeconomic impact of the coronavirus pandemic may not be feasible, it is still useful to identify possible
transmission channels through which the pandemic may affect the Egypt economy and society. It is also useful International Journal of Social
to identify key issues that are likely shape short- and medium-term socioeconomic prospects in Egypt as a Economics
result of the COVID-19 pandemic outbreak in Egypt. Vol. 49 No. 1, 2022
pp. 21-33
Keywords COVID-19, Petroleum sector, Egypt, Socioeconomic © Emerald Publishing Limited
0306-8293
Paper type Research-paper DOI 10.1108/IJSE-10-2020-0688
IJSE 1. Introduction
49,1 The COVID-19 pandemic resulted from the worldwide spread of the severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2), initially labelled the “novel coronavirus” or nCoV-
2019. The first reports of the virus outbreak occurred in December 2019 in Wuhan City in the
Hubei province of the People’s Republic of China. By the beginning of 2020, SARS-CoV-2 had
already spread beyond the borders of China. The World Health Organisation declared
COVID-19 a public health emergency of international concern on 30 January 2020 and a
22 global pandemic on 11 March. Ultimately, the virus spread to a reported 235 countries and
territories worldwide.
This pandemic has had a significant impact on the world economy, affecting both
developing and developed countries, with serious socioeconomic and even political
repercussions. As the pandemic continues, it is becoming ever clearer to both economic
and political analysts that it will leave the world with long lasting economic, political and
even social changes.
The current pandemic COVID-19 represents far more than a significant health crisis; it has
affected societies and their economies to the core. Many studies have recently been conducted
in order to analyse all dimensions of this crisis and its impact on health, society and the
economy. Studies have also attempted to address the need to find methods of mitigating these
effects. Many analysts believe that this pandemic has resulted in a world economic situation
that is similar to – if not worse than – the Great Depression of the 1930s.
There are many channels through which an infectious disease outbreak may influence
the economy at the macrolevel. Direct and indirect economic costs of illness are often the
subject of studies addressing health economics and the burden of disease. Direct costs of
handling the effects of pandemic stem from the economic burden on the local healthcare
system, while indirect costs are connected to the effect of an outbreak on labour
productivity and economic activities. The current pandemic has also had varied effects on
different economic sectors with some sectors having been more deeply and directly
affected by the economic slowdown than others. In fact, even within a single sector, certain
economic activities have been impacted more significantly than others, with the net effect
on each particular activity being possibly positive or negative. Whereas, for example, the
net effect on the industrial sector has led to general slowdown, some industries, including
the medical and pharmaceutical, e-commerce and shipping industries, have actually
managed to accumulate profits. The effect of the pandemic has also varied from country to
country, depending on the ability of each country’s economy to adapt to the global
changes. Thus, although it is important to examine the macroeconomic impact of the
COVID-19 pandemic, an examination of impact of the pandemic on each individual sector
of a particular economy would lead to a more thorough understanding of the long-term
economic effects of COVID-19.
In this context, this study aimed to analyse in depth the socioeconomic impact of the
COVID-19 pandemic on the Egyptian oil industry. Although Egypt is still considered a net oil
importer, recent oil discoveries have made the country an important player in the oil market,
as Egypt became the fourth largest oil producer in Africa and the largest non-OPEC producer
in the Middle East. Adding to this is the fact that a significant proportion (about 13%) of
global crude oil trade is transported through the Suez Canal and inland through SUMED oil
pipelines between the Red Sea and the Mediterranean (Mabrouk et al., 2020).
Recent oil discoveries in Egypt have helped reduce the gap between oil imports and
exports and have led to increased private and public investment in this sector of the economy.
This study examined the socioeconomic impact of COVID-19 pandemic on the Egyptian oil
industry at two levels: the direct impact of the pandemic on sector performance as well as on
the socioeconomic conditions of its labour force and the indirect impact of the pandemic on
the Egyptian economy as a whole secondary to its effect on the oil industry.
2. Literature review Impact of
The conventional or traditional approach of examining the economic impact of a disease uses COVID-19 on
information on deaths (mortality) and illness that prevents work (morbidity) to estimate lost
future income due to death and disability. Loss of time and income as well as direct
the petroleum
expenditures due to healthcare costs and costs of supporting services are added to obtain an sector
estimate of the economic burden of a disease. This conventional approach invariably
underestimates the true economic burden of infectious diseases of epidemic proportions
which are highly transmissible and for which there are yet no vaccines (e.g. HIV/AIDS, SARS 23
and pandemic influenza). Current attempts at analysing the true economic impact of
COVID-19 are likely to be more comprehensive, as studies now take into consideration the
high infectivity and ease of spread of the disease and the pandemic’s complicated effects on
the global economy.
In this context, many studies have found that population health, as measured by life
expectancy, infant and child mortality and maternal mortality, is positively related to
economic welfare and growth (Pritchett and Summers, 1996; Bloom and Sachs, 1998;
Bhargava et al., 2001; Cuddington et al., 1994; Cuddington and Hancock, 1994; Robalino et al.,
2002a, b; WHO Commission on Macroeconomics and Health, 2001; Haacker, 2004).
One of the main studies that has investigated the macroeconomic impact of health crises is
the study of Lee and Mckibbin (2004) that focused on the economic impact of the SARS
pandemic of 2003. The study concluded that the main economic impact of this health issue
was a reduction in private consumption, a raise in production costs and an uncertainty and
increased risk associated with investment.
Another study by Bloom et al. (2005) examined the economic impact of the 2003 avian flu
pandemic. This study employed the Oxford University simulation model which predicted
different possible scenarios of spread of the avian flu, ranging from moderate to severe. The
study concluded that the main effect of this pandemic on East Asian economies was through
its effect on private consumption. This reduction was estimated to reach 2.5% of GDP (113.2$
billion) in the short run and 6.5% of GDP in the long run. The study also estimated the
resultant global reduction in GDP due to the avian flu pandemic to have stood at 0.6% and the
reduction in international trade at 14%.
The economic burden of the COVID-19 pandemic in 24 countries was examined by McKibbin
and Fernando (2020), using a G-Cubed model. Several scenarios of mortality rates and spread of
the disease led the study to estimate total loses at between 283 and 2,230 billion dollars.
There are only a limited number of studies that have the impact of COVID-19 on the oil
industry. The study by Nicola et al. (2020) aimed to identify and summarise the socioeconomic
effects of COVID-19 on separate aspects of the world economy by analysing the impact on
different economic sectors, including the oil industry. The paper concluded that, although oil
prices had been on a downward trend before the pandemic, the crisis may have the long-term
effect of stabilising oil prices, while paradoxically creating uncertainty in global oil market.
The study also concluded that importing nations would not be able to take advantage of the
reduction in oil prices, as they would have to redirect the money saved to support added costs
of healthcare and government-provided social support.
A study by Akrofi and Antwi (2020) aimed to review how governments in Africa had
responded to the challenges of the COVID-19 pandemic within the energy sector. The paper
concluded that most preliminary responses were short-term and included the provision of
free electricity, waiver/suspension of bill payments and exemptions to payment of value
added taxes on electricity. These measures were more pronounced in sub-Saharan Africa.
One the other hand, most of North Africa’s oil rich countries had implemented broad
economic measures that targeted their oil and gas sectors. The paper noted that economic
stimulus packages implemented by most African countries did not explicitly allocate funds
for energy sector companies/institutions.
IJSE In the same context, the study by Iyke (2020) surveyed the reaction of the US oil and gas
49,1 producers to the COVID-19 pandemic. The study examined daily US COVID-19 reports and
correlated them with daily stock market data pertaining to 90 US oil and gas companies in
order to estimate the day-to-day effects of the pandemic on stock returns. The paper found
that US firms reacted to the pandemic heterogeneously. The pandemic significantly
explained 28% of returns and 275 of return volatility. According to the paper, this
heterogeneous reaction of firms could be driven by firm specific characteristics, such as size
24 and turnover rate.
In yet another study, Norouzi et al. (2020) conducted a comparative regressive and neural
network model to analyse the impact of COVID-19 on electricity and petroleum demand in
China. Environmental analysis showed that the pandemic had significantly affected China’s
demand for electricity and petroleum, both directly and indirectly. The paper found that
elasticity in the demand for petroleum and electricity within infected populations had stood at

0.1% and
0.65%, respectively.
Our literature review suggests definite economic and social challenges due to the COVID-
19 pandemic and indicates that the pandemic has had a significant impact on both supply and
demand in the oil industry.

3. Methodology
For the purpose of this study, two different methods were used to identify the possible effects
of the COVID-19 pandemic on the Egyptian oil sector. First, to analyse the socioeconomic
implications of COVID-19 on the Egyptian oil industry and its workers, a sample of workers
from the Egyptian petroleum sector was surveyed and an analysis of their responses to the
questionnaires was conducted. Data were analysed using the SPSS software, version 18.0.
Descriptive analysis was reported as frequencies and percentages. Second, a macroeconomic
impact analysis was conducted through the examination of the economic performance data of
the Egyptian oil sector (supply and demand data). In addition, the possible impact of the
performance of the oil sector on the wider Egyptian economy was analysed. To that end, the
possible effects of the oil industry’s performance on the on the balance of payments, public
budget and other macroeconomic parameters were examined. Data were collected from
official Egyptian government reports, including those published by the Central Agency for
Public Mobilisation and Statistics, the Egyptian Ministry of Finance and the Egyptian
Ministry of Petroleum and mineral resources.

4. Results and discussion

Egypt is one of the first countries in the world to have had significant petroleum discoveries
and a growing oil sector. In 1886, the first well was drilled in the area of Jamsa (470 km from
Cairo) on the west coast of the Red Sea. Commercial production started in 1910. This was
followed by many other oil discoveries. In 1961, the first offshore oil field in Egypt and the
Middle East, the Belayiem field, was discovered.
The largest share of Egypt’s oil production (56%) belongs to the Western Desert; followed
by the Gulf of Suez at 23%; the Eastern Desert at 12%; and the Sinai Peninsula at 9%. Oil
production is conducted by 43 companies. The most important Egyptian companies are:
Khalda, PETROBEL, GUPCO, General Petroleum Company, AGIBA and BAPETC.
International oil companies conducting business in Egypt include Apache, ENI, Dragon
Oil and Royal Dutch Shell.
Because of recent intensive exploration projects, 239 discoveries (157 oil – 82 gas) have
been made, adding about 355 million barrels of oil to Egypt’s oil and gas reserves, with an
additional set of 36 TCF gas discoveries, beginning in 2013. Sixty-eight (68) development
leases for new discoveries were signed in the Mediterranean, the Western and Eastern Impact of
deserts, with total development bonuses of 33.2 million dollars. COVID-19 on
(1) The economic importance of the oil sector in Egypt the petroleum
The oil industry plays a significant role in the Egyptian economy. In 2019, the oil industry (oil sector
and natural gas) generated about 11% of the Egyptian GDP, with oil exploration alone
generating about 50% of this share (see Figure 1). Manufacturing activities related to oil
represented about 26% of the manufacturing sector’s value-added production, contributing 25
about another 4% of the country’s GDP in 2019. The oil sector attracts the majority of foreign
direct investment (FDI) in Egypt. In 2018/2019 it accounted for 74.3% of total foreign
investment inflows (over $10 billion). Not only have these foreign investments in oil sector
provided foreign currency inflows into the Egyptian economy, they also have led to the
transfer of technology, allowing, for example, for the establishment of NOCs in the 1970s.
More recently, such transfer of technology has help Egypt complete such mega infrastructure
projects as the Suez Canal Tunnels and a number of new underground lines in the Greater
Cairo Area (Mabrouk et al., 2020).
Since 2015, the oil industry’s value-added production has witnessed a relatively high rate
of growth, fuelled by increased investments (both public and private) and recent new
explorations. The oil industry’s value-added production increased by about 56% in 2016/
2017 alone (see Figure 2).

Services
61%
Gas
Extraction 5%
Industries others
11% 1%
Oil
5%

Agriculture
11%
Manufacturing
17% Figure 1.
Egypt GDP by
Source(s): Egypt Ministry of Planning and Economic Development, National economic sector 2019
Accounts Data. At: www.mped.gov.eg/economic indicators.html

250000.0 70%
60%
200000.0 50%
40%
150000.0
30%
20%
10%
100000.0
0%
–10%
50000.0 –20%
–30%
0.0 –40%
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Figure 2.
public private growth rate Egypt oil sector value
added (2011/2012–
Source(s): Egypt Ministry of Planning and Economic Development, National Accounts 2017/2018)
Data. At: www.mped.gov.eg/economic indicators.html
IJSE According to the Egyptian Ministry of Mining, around 183 thousand employees currently
49,1 work for the oil industry, out of which 80% work in oil refining and 20% in extractive
industries. This represents only 1% of Egypt’s total workforce; a reflection of the industry’s
low rate of job creation. And yet, jobs in the oil industry offer one of the highest average wage/
salaries, averaging EGP 2,250 weekly. This is comparatively 45% higher than the average
salary offered in the tourism industry (1,555 EGP) and almost four folds higher than wages in
agriculture (766 EGP) and non-oil manufacturing sectors (574 EGP) (CAPMAS, 2019).
26 As oil production increases in Egypt, so does consumption. In fact, Egypt is the largest
energy consumer in Africa, with annual consumption exceeding 4 trillion BTU. This is due in
part to Egypt’s relatively high industrial output and its high population growth rate. But
Egypt is still considered a net importer of oil (crude and oil products) despite a tightening in
the gap between oil exports and imports in recent years due to a sharp increase in exports of
both crude and oil products (see Figures 3 and 4).
The international oil industry has been severally strained by the COVID-19 pandemic. Oil
prices plummeted at the start of the pandemic as global demand sharply decreased, especially
with the impact of COVID-19 on the economies of major oil consumers: China, the EU and the
USA (see Figure 5). In March 2020, Brent crude oil hit below 20 dollars per barrel; its lowest
prices since the 1991 Gulf War. Prices of Brent crude had topped around 63 dollar per barrel

2018/2019

2017/2018

2016/2017

0 2000 4000 6000 8000 10000 12000 14000

Figure 3. Imports Exports

Oil merchandise
balance Source(s): Egypt Central Bank, External Trade Annual Data. At: www.cbe.org.eg/en/
Economic Research/Statistics/Pages/TimeSeries.aspx

Crude oil Oil products

2018/20

IMPORTS 2567.8 8122.7

19

EXPORTS 4851.3 4824

2017/20

IMPORTS 2534.4 7951.6

18

EXPORTS 4600.8 3490.4

2016/20

IMPORTS 1898.9 7391

17

Figure 4. EXPORTS 3876 2202.3

Oil exports and
imports Source(s): Egypt Central Bank,External Trade Annual Data. At: www.cbe.org.eg/en/Economic
Research/Statistics/Pages/TimeSeries.aspx
 Impact of
COVID-19 on
the petroleum
sector

27

Figure 5.
Expected monthly
change in oil demand
from 2019 to 2020

before the pandemic. Although prices have slightly increased since March, it is still below its
fair price, estimated at around 60 dollars per barrel (see Figure 6). To mitigate the effect of
reduced demand, the global oil supply has been cut by 2% from 101.89 million barrels per day
in November 2019 to 99.96 million barrels per day in February 2020 (International Energy
Organization, 2021). Global oil investments have also decreased sharply; more than 21
international oil companies have announced capital cuts of 20–50% in 2020.
On the national level, the effect of the COVID-19 pandemic on the oil industry has differed
from one country to another depending upon the economic importance of this sector and
whether the country was net exporter or importer of oil.
Despite the recent oil and gas explorations in Egypt, the country could not be considered a
major oil producer and is still a net exporter of oil and gases. This explains why the COVID-19
pandemic has had both positive and negative effects on Egypt’s economy.
(2) Tracing the impact of COVID-19 on Egyptian oil sector
Supply and demand in the oil Egyptian industry passed several stages in 2020, largely as a
result of the COVID-19 pandemic. At the beginning of 2020, a positive global supply shock,

Figure 6.
Brent Crude Oil price
(July 2019–June 2020)
IJSE generated by the “oil price war” between Saudi Arabia and Russia, had positively impacted
49,1 the Egyptian oil sector. Mabrouk et al. (2020), noted the following:
(1) At the start of 2020, there was an increase of 33% in oil flow through the SUMED
pipelines compared with the same period in 2019, totalling up to 1.1 million bbl/day in
January 2020. This increase in oil flow was also 13% higher than that during
December 2019.
28 (2) Concomitantly, there was a significant decline in Egypt’s oil imports bill, despite a
23% increase in the volume of oil imports compared with December 2019.
(3) Both oil production and exports remained stable with only a slight decrease in
production during the same period.
As the disease spread worldwide, a negative demand shock took place. This impacted Egypt
as follows (Mabrouk et al., 2020):
(1) Lower rates of industrial activities led to a 9% drop in oil consumption in March 2020
compared with March 2019.
(2) Imports continued to increase, albeit at lower rates, reaching their highest peak since
2017 in March 2020 (318.5 bbl/day). Oil imports then decreased by 37.3% in April
(compared with March 2020). This occurred despite lower oil prices, due to the
inability of the industry to store or refine higher amounts of imported oil. By May
2020, however, storage space had been freed up and the oil imports rebounded, albeit
at a lower average rate of 260 thousand bbl/day.
(3) Concomitantly, Egyptian oil exports went through their own fluctuations. Exports hit
their lowest levels in March 2020 but quickly rebounded by 62% between March and
May and by another 35.5% between May and July.
(4) The new subsidies bill, passed by the Egyptian Parliament, decreased oil subsidies by
47% compared to 2019.
(5) As the global oil production decreased due to the OPEC þ agreement [1], oil flow
through the SUMED pipelines dropped by 42% – to 1.2 million bbl/day – in May 2020.
That was followed by a sharp 57% fall by July 2020 (to 0.5 million bbl/day).
(6) The socio-economic impacts of COVID-19 on Egyptian oil sector:
Oil production-related processes in Egypt seem to have been affected by the drop in oil prices and
the lockdowns imposed around the world. National oil companies have been impacted by a
decrease in workflow due to a pandemic-related reduction in the workforce, a decrease in possible
working hours and/or the lockdown procedures that have hindered movement to production
sites. This has potentially had its socioeconomic impact on the 183,000 oil sector workers.
To analyse the possible socioeconomic impact of COVID-19 on oil sector workers, this
study conducted a survey of 123 workers, 35% of which were public or governmental sector
workers (see Figure 7). The results of the survey suggested that 78% of the workers in our
sample believed that the pandemic had negatively affected the oil industry in Egypt. Of the
same sample, 61% indicated their belief that COVID-19 had affected daily production.
Workers also indicated that COVID-19 had reduced movement to and from the oil fields both
in Egypt and abroad and had caused a reduction of working hours.
In addition, 37.4% of the surveyed workers reported a reduction in their monthly income due
to salary cuts. About 18% of the sample also reported having had to spend a significant portion
of their savings, with 5.7% reporting a total loss of savings. About 63% of workers surveyed
indicated a belief that the oil industry was no longer financially safe after the pandemic.
 Gender Educatonal staus
Impact of
COVID-19 on
the petroleum
sector

29

Male Female secondary university postgraduate

material status monthly income (Egyptian

pound)

married not married better not to mention 1000-5000

5000-10000 10000-20000

job description Age

Figure 7.
Survey sample
administrative office work field lab others 20 -25 26 -35 36 -45 46 -55 56 -65 description

As severe as the effects on the oil industry workers may be, these effects should be short-term
effects and that could be mitigated through the adequate social and economic policies and
which should not last beyond the pandemic itself. The pandemic should not have permanent
socioeconomic effects on these workers (see Figure 8).
Surprisingly, the COVID-19 pandemic may have had indirectly positively impacted the
Egyptian oil industry. This can be summarised as follows:
(1) Effects on external trade: The drop in oil prices has reduced the cost of oil imports.
The cost of oil imports decreased from 12.1 billion dollar in the 2018/2019 fiscal year
to about 6 billion in 2019/2020. This number is expected to fall further in 2020/2021 as
a result of the drop in oil prices. This has helped reduce/will further help reduce
Egypt’s the overall trade deficit.
(2) Effects on the government deficit: The Egyptian budget should also benefit from the
reduction in oil prices, as public expenditure on oil products should also decrease.
According to the Egyptian Ministry of Finance, each dollar reduction in oil prices
IJSE Did the petroleum sector daily Did the sector income affected
49,1 production affected negatively? negativly

30
yes no not sure yes no not sure

did your income affected Did you affected mentally and

socially

limited effect lost lots of my deposits

no effect lost my job
lost all my deposit limited effect affected obviously no

if the pandemic extended, will you is the petroleum sector a financially

continue in working in the sector safe sector after the pendemic

Figure 8.
Survey results yes no not sure yes no not sure

decreases public expenditure by about 4 billion Egyptian pounds (approximately 200

million dollars). This would help reduce the current deficit and help mobilise more
money into the economy. Savings due to lower oil prices could be directed to help
increase investments as well as to fund social support programmes [2].
As governments ease lockdowns and the world economy reopens, a positive demand shock in
oil is expected, with a predicted rise in demand of between 90 and 99 million barrels during the
months of 2021.

5. Conclusions
This study has presented some preliminary estimates of the impact of the COVID-19 outbreak
on petroleum sector in Egypt. The goal was not to be definitive about the virus outbreak, but
rather to provide information about a range of possible economic costs of the disease. While a
detailed quantification of the socioeconomic impact of the coronavirus pandemic may not be
feasible, it is still useful to identify possible channels of transmission through which the
pandemic may affect the Egypt economy and society. It is also useful to identify key issues
that are likely shape short- and medium-term socioeconomic prospects in Egypt as a result of
the COVID-19 pandemic outbreak in Egypt.
A range of policy responses will be required both in the short term as well as in the
coming years.
 In the short term, central banks and treasuries will need to make sure that disrupted Impact of
economies continue to function while the disease outbreak continues. In the face of real and COVID-19 on
financial stress, there is a critical role for governments. While cutting interest rates is a
possible response for central banks, the shock is not only a demand management problem but
the petroleum
a multi-faceted crisis that will require monetary, fiscal and health policy responses. sector
Quarantining affected people and reducing large scale social interaction is an effective
response. Wide dissemination of good hygiene practices, as outlined in Levine and McKibbin
(2020), represent a low cost and highly effective response that can reduce the extent of the 31
contagion and therefore reduce the social and economic cost.
Although the COVID-19 pandemic has negatively impacted the socioeconomic situation of
oil sector worker, reducing incomes and job security, these effects should be short-term
effects that could be mitigated through the adequate social and economic policies and which
should not last beyond the pandemic itself. The pandemic should not have permanent
socioeconomic effects on these workers.
In this subsection, an analysis of the first results of a still ongoing survey of oil sector
workers, launched in March 2020, is presented. Survey questions were designed to tackle
preparedness for the COVID-19 pandemic and the indirect socioeconomic effects of the
pandemic. The aim remains to survey nearly all workers in petroleum sector not “directly”
affected by COVID-19. To date, 123 have responded, although not all fully.
Economic effects: Some African countries may not have all the necessary most recent data
of economic indicators needed to ascertain with certainty the economic impact of the COVID-
19 pandemic. And, at the event that data are completely available, analysts must consider
that any worsening of the economy may not stem directly from the pandemic itself. Causality
has to be clearly established.
The survey therefore focused on the attitudes and perceptions of oil sector workers,
irrespective of whether a given indicator had been affected by the pandemic or is seen likely to
be affected by it in the future.
All those responding have reported the belief that economic indicators, such as GDP growth,
inflation and trade had been impacted negatively by the spread of COVID-19. They also believed
the effects of the pandemic on transport to have had direct effects on the oil industry.
Social effects: The social impact of the pandemic was less apparent, particularly among
governmental sector workers compared with those in the private sector. However, freelancers
have reported some issues that may be become more apparent through aggregated data.
Based on the above analysis, the following policy recommendations are suggested as a
way of mitigating the socioeconomic impact of the coronavirus pandemic on the oil industry
in Egypt:
(1) These measures need to be complemented by a strong social protection response that
ensures that the basic needs for all people are met during the crisis. This response
should build upon existing initiatives and programmes and introduce inclusive social
protection measures that help those more in need, with a specific focus on freelance
workers. Social distancing measures that has been introduced by the government has
reduced people’s ability to work or earn a living, Thus, social protection measures
should preferably focus on providing cash to proper beneficiaries.
(2) Keep workers finically safe: workers and employers and their families should be
protected from the economic risks of COVID-19. Protective measures and information
campaigns at the workplace and across communities should be introduced and
strengthened, and large-scale public support and investment should be sought. This
should ideally include the introduction of flexible work schemes for companies and
government agencies that would allow them to implement teleworking schemes.
IJSE Notes
49,1 1. On 12 April 2020, the 10th extraordinary OPEC and non-OPEC ministerial meeting was held to
discuss the dynamics of the oil market and decide on future production levels. They agreed to
decrease their overall crude oil production by 9.7 million bbl/day, starting on 1 May 2020, for an
initial period of two months that concluded on 30 June 2020. For the subsequent period of
6 months, they agreed to a total adjustment of 7.7 million bbl/day. This was agreed to be followed
by 5.8 billion bbl/day for a period of 16 months, from 1 January 2021 to 30 April 2022. For more
32 details:
2. Based on the Egyptian analytical separated statements 2019–2020 and 2020–2021 issued by
Egyptian Ministry of finance, at: www.mof.gov.eg

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Appendix
The Appendix contents available online for this article.

Corresponding author
Kholoud M. AbdelMaksoud can be contacted at: kholoud.mohamedali@gmail.com

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