883.6363/93: Telegram

The Minister in Egypt (Kirk) to the Secretary of State

306. The American oil companies operating in Egypt are disturbed because they have not been able through their usual contacts to obtain a satisfactory explanation of the reasons which actuated the Egyptian Government in imposing the export duty of 15% ad valorem as well as a statement as to the nature of the application envisaged (see Legation’s 232, February 2). British Embassy at instigation of Shell Company is asking Minister of Finance31 for explanation and I am approaching the Foreign Office informally and orally on the same thing.

The following theses have been put forward as possible reasons for the new export duty which has been stated to apply to crude oil petroleum products and all other exports except cotton and scrap metals (which are subject to specific rates):

The Egyptian Government did not have petroleum in hand [mind?] when the duty was imposed.
The Egyptian Government did have petroleum in mind and the duty was aimed at the Shell Company which is exporting asphalt from Suez.
The duty is intended to remain in force for only 1 year for the purpose of balancing the budget.
The British have through the duty on petroleum to handicap the operation of the Alexandria refinery and the pipe line leading to it [sic].

  1. Amin Osman.