Analyzing the Impact of Fuel Rents on Poverty in Egypt

Mossad, Zeina; Mossad, Sara; Raouf, Engy

doi:10.21608/erurj.2025.388210.1291

Analyzing the Impact of Fuel Rents on Poverty in Egypt

Document Type : Original Article

Authors

¹ Economics, Faculty of Management, Economics and Business Technology, Egyptian Russian University

² Economics, Faculty of Management, Economics and Business Technology, Egyptian Russian University, Faculty of commerce and Business administration, Helwan university, Cairo, Egypt

10.21608/erurj.2025.388210.1291

Abstract

This study investigates the dynamic relationship between fuel rents and poverty in Egypt over the period 1991–2021 using an Autoregressive Distributed Lag (ARDL) model to capture both short-run and long-run effects. Although resource-rich economies like Egypt have the potential to utilize fuel rents to alleviate poverty, empirical findings are often inconclusive due to factors such as price volatility, Dutch disease, and institutional challenges. Employing annual time-series data, the analysis examines how oil rents—as a percentage of GDP—impact poverty levels, controlling for GDP growth and inflation. The results of this paper indicate that, in the short run, fuel rents and macroeconomic variables have statistically insignificant effects on poverty, reflecting complex and delayed transmission mechanisms. However, the overall model demonstrates strong explanatory power, suggesting these variables jointly influence poverty dynamics. The findings contribute to the ongoing debate on the resource curse in Egypt and underscore the importance of prudent fiscal management and complementary policies to convert fuel wealth into sustainable poverty reduction. This research offers valuable insights for policymakers seeking to mitigate resource dependence risks while promoting inclusive economic growth.

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