KUWAIT, April 8 (Reuters) - Kuwait's national oil group will provideEgypt with 85,000 barrels of crude oil per day under a new contract which boosts supply from the Gulf Arab state by 31 percent, state news agency KUNA reported on Tuesday.

Kuwait Petroleum Corporation (KPC) will also increase its supply of diesel and jet fuel to 1.5 million tonnes per year, up from 860,000 tonnes previously, KUNA said.

Egypt has been relying on crude deliveries from the Kuwaiti government at favourable terms as well as on donations of gasoline and diesel from Gulf Arab states to help reduce the drain on its foreign exchange reserves and the heavy costs of government fuel subsidies.

The new contracts, signed with Egypt's General Petroleum Corporation on Monday, are valid until the end of 2016 and based on global market prices, KPC official Nasser al-Mudaf told KUNA.

The previous KPC oil supply contract was for 65,000 barrels of crude per day.

Mudaf, who runs KPC's global marketing business, added that KPC was willing to sign additional contracts with Egypt to supply cooking gas and fuel oil within the next two months and that these would also be based on international prices.

Kuwait is also considering using Egyptian refineries to process Kuwaiti oil as well as using shipping facilities in the country, Mudaf said.

Egyptian Oil Minister Sherif Ismail told Reuters in February that Egyptwould need to import an additional $1 billion worth of petroleum products and secure significant natural gas supplies to meet energy needs for the summer.

The Gulf Arab states of Saudi Arabia, United Arab Emirates and Kuwait, wary of Egypt's Muslim Brotherhood, gave Egypt billions of dollars in aid, including oil, after the ousting of Islamist president Mohamed Mursi.

In July last year Kuwait pledged $4 billion to Egypt, with a $2 billion central bank deposit, a $1 billion grant and $1 billion in oil products. This was separate from an oil supply contracts which Kuwait has had withEgypt for years and which was due for renewal. (Reporting by Sylvia Westall; editing by Jason Neely)