54 months later (EEDC 2015a). Meanwhile, in the face of acute gas shortages and growing power outages, the government began diverting high levels of gas produced by foreign companies to the domestic market. By 2014, gas exports had all but ceased, and BP Group declared force majeure in January 2014 for failing to meet its export commitments ( _Financial Times_ 2014). These development eroded investor confidence in upstream oil and gas, turning Egypt into an importer of LNG in 2015.

Before the collapse of the world oil price, the government had planned to allocate about half of the fiscal savings from subsidy reform—US$3.6 billion—to pay for health, education, and social protection programs. US$0.7 billion would specifically target social protection programs. In FY 2013/14, spending health and education amounted to about US$17 billion. The government has already doubled the maximum benefit allotted under the Social Solidarity Pension—currently the country’s largest welfare scheme—and is also committed to expanding its coverage substantially and improving its targeting. The government is also preparing to launch two cash transfer programs, one conditional cash transfer program for households with young children, and the other an unconditional cash transfer program for the elderly poor and the disabled. To identify targeted populations more accurately, the government is exploring proxy‐means testing, poverty mapping, and the use of smart cards to facilitate enrollment and payment automation (EEDC 2015a).

The government is also developing a broad‐based communications plan to build consumer awareness about unintended harmful effects subsidies and alternative uses of the savings from subsidy reduction. The analytical work underpinning the communications strategy was extensive:

- More than 2,000 households were surveyed about their energy use, understanding of subsidies and potential reform measures.

- Focus group discussions were held with a wide range of stakeholders, including transport operators, energy‐intensive small and medium enterprises, small farmers, and youth.

- Policy makers, business leaders, and industry representatives were interviewed about their attitudes toward and appetite for energy subsidy reform.

- A computable general equilibrium model was used to assess likely economic effects of reform on various stakeholders.

The findings of the survey conducted in April 2014—before the large price increases of July 2014—were revealing. Two‐thirds of the respondents believed that energy prices in Egypt were too high. Two‐thirds also had no idea of the scale of energy subsidies. But when presented with budget allocations for energy subsidies, three‐quarters of the respondents reported that it was a bad use of public funds. Two‐fifths of the respondents had serious or very serious concerns about the government’s ability to manage the savings from subsidy reduction effectively. These findings demonstrate the importance of informing the public, and winning the public’s confidence by strengthening budget planning, budget execution, and social protection measures.

# **Gabon**

The IMF estimates that fuel subsidies in Gabon amounted to CFAF 229 billion (US$450 million) in 2012, 220 billion (US$450 million) in 2013, and 125 billion (US$260 million) in 2014, corresponding to 2.8, 2.6, and 1.5 percent of GDP, respectively. The government has historically subsidized fuel prices, adjusting them infrequently. The government in January 2014 eliminated industrial diesel subsidies except for