A member of Egypt’s House of Representatives has sounded the alarm over a potential government move to gradually lift subsidies on natural gas supplied to the industrial sector, warning it could have “serious repercussions” on the national economy.
MP Mahmoud Essam filed an urgent inquiry to Prime Minister Mostafa Madbouly and the petroleum and industry ministers, urging them to clarify their plans for industrial gas prices. His move comes amid reports that the government intends to gradually phase out gas subsidies and raise prices over the next three years.
In his inquiry, which Al Manassa reviewed, Essam cited information indicating that officials are considering ending subsidies on industrial gas and imposing a gradual increase of $1 per million British thermal units (MMBtu). He said the move would place an immediate and significant burden on Egypt’s industrial sector—one of the pillars of the national economy—and could trigger “serious repercussions.”
“If implemented, this step would severely undermine the competitiveness of Egyptian industry both locally and in export markets, due to the sharp rise in production costs,” he warned, adding that “the uncertainty surrounding these plans creates an unfriendly climate for industrial investment and threatens the expansion of both current and future factories.”
He also noted that energy-intensive factories might be forced to scale back or suspend some production lines, with negative implications for job security in the industrial sector.
Any increase in production costs would inevitably be passed on to the final consumer, Essam added, cautioning that this would likely fuel a new wave of inflation that would hurt ordinary citizens.
Essam stressed that such a policy shift would be at odds with Egypt’s strategic goals and the directives of the political leadership, which focus on supporting local industry and boosting exports.
He called on the government to be fully transparent about its gas pricing policies for the industrial sector and to engage in broad community dialogue with industry representatives before making any decisions that could affect this vital sector.
Egypt’s natural gas production has been declining since 2023, with output falling short of the estimated daily consumption of around 6 billion cubic feet. This shortfall has caused disruptions in energy supplies for key activities such as electricity generation and industrial production.
On May 19, the government cut natural gas supplies to local fertilizer and methanol plants by 50% for 15 days, after Israel informed Cairo of routine maintenance work on one of its export pipelines. That work is expected to impact the quantities of gas supplied to Egypt over the summer months, according to Asharq Business.
In the first quarter of this year, Egypt’s natural gas imports soared to $1.73 billion—a 148% increase from the $696 million recorded in the same period last year—according to a source familiar with import data at the state-owned Egyptian Natural Gas Holding Company (EGAS) who previously spoke to Al Manassa.
