141. High and unsustainable levels of fuel and energy subsidies are a persistent fiscal challenge in the MENA region. For instance fuel subsidies accounted for approximately 20% of government expenditure in Egypt before reductions announced in July 2014 (OECD, Business Climate Review of Egypt, 2014). In addition to the fiscal and environmental costs of these policies, they are also highly distortive of transportation economics and may skew intermodal comparisons in favour of more fuel intensive modes. Reforming these subsidies is very politically sensitive.