KEY POINTS
- Egypt has increased natural gas prices for industries, affecting sectors like cement, steel, and petrochemicals.
- The move is part of wider reforms linked to an IMF programme and rising global energy costs.
- While industries face higher costs, consumers are not directly affected by the new pricing.
The government of Egypt has raised natural gas prices for several industries as part of efforts to manage rising energy costs. The decision, announced through a prime ministerial decree, took effect in May and targets energy-intensive sectors such as cement, steel, and petrochemicals.
Under the new pricing structure, gas costs have increased by an average of $2 per unit, with cement factories now paying $14 per million British thermal units. Other sectors, including iron and steel, fertiliser production, and petrochemicals, will also face higher rates.
This latest increase comes after the government previously raised domestic fuel prices by up to 17 percent in March. These steps are part of broader economic adjustments aimed at addressing the impact of rising global energy prices.
Authorities are also working to reduce spending on fuel and electricity subsidies, a key condition tied to an $8 billion support programme agreed with the International Monetary Fund (IMF). The reforms are intended to stabilise the economy and manage public finances more effectively.
Industrial sectors face higher production costs
The new pricing affects a wide range of industries. Gas prices for iron and steel production, as well as non-nitrogen fertilisers and petrochemicals, have been set at $7.75 per unit. Other industrial activities, including plants producing ethane and propane mixtures, will pay between $6.50 and $6.75.
These increases are expected to raise production costs for manufacturers, which could have a knock-on effect on prices of goods and overall industrial output.
Despite the rise in industrial gas prices, the government stated that households will not be affected. Consumer gas supply contracts already include pricing formulas, meaning the new adjustments apply only to industrial users.
This approach appears aimed at balancing economic reforms with efforts to limit the immediate burden on citizens.
Egypt’s decision is largely driven by increasing energy import costs. The country’s energy bill has more than doubled in recent times, with monthly spending on natural gas imports nearly tripling.
This surge has been linked to global supply disruptions and increased reliance on liquefied natural gas imports and regional suppliers, especially amid ongoing geopolitical tensions affecting energy market.
