Egypt will begin quarterly reviews of natural gas prices for industrial consumers starting January 2026. This will end a cycle of erratic pricing decisions that have long frustrated manufacturers, according to a senior official at the Egyptian Natural Gas Holding Company/EGAS, who spoke to Al Manassa on condition of anonymity.
The shift follows the government’s September decision to impose a minimum $1 hike per one million British thermal units (MMBtu) on gas supplied to energy-intensive industries, a move publicly confirmed by Minister of Industry Kamel Al-Wazir.
By mid-October, Al-Wazir had stated that future pricing would reflect a weighted average of domestically produced gas and imported volumes, in a bid to align tariffs with actual procurement costs.
Egypt is aiming for a “gradual, calibrated adjustment,” toward what the government describes as a “fair price” for industrial gas—one that balances cost recovery with industry viability, explained the official to Al Manassa.
That price will be calculated using a complex basket of inputs: the cost of imported liquefied natural gas (LNG), gas purchased from Israel, rental fees for regasification vessels stationed in Egypt’s territorial waters, and the price paid to foreign energy partners for their share of gas produced in Egyptian fields.
Factories located in free zones will face a separate pricing formula, indexed to their export revenues and international product pricing—particularly for fertilizer producers—resulting in tariffs that differ from those targeting factories serving the domestic market.
“Some factories have called for eliminating the additional dollar surcharge on their gas bills,” the source said. “But the petroleum sector insists the cost gap between gas procurement and sale prices continues to widen dangerously.”
Industrial consumption stands between 1.9 and 2.1 billion cubic feet per day, with part of the supply coming from domestic production and the rest imported—chiefly from Israel and LNG markets, revealed the senior official.
In June 2025, Israel unilaterally suspended gas exports to Egypt amid escalating hostilities with Iran and the ongoing Israeli war on Gaza. The cutoff crippled fertilizer production and drove prices sharply higher. Gas flows resumed only gradually after June 26, once fighting began to subside.
Fertilizer and petrochemical plants account for 35% to 40% of total industrial gas use, with gas comprising as much as 85% of their production costs, the official noted.
Egypt currently produces about 4.2 billion cubic feet of natural gas daily, covering around 60% of national demand. EGAS aims to boost output to 6.6 billion cubic feet per day by 2027 through intensified exploration and development, according to another source from EGAS who previously spoke to Al Manassa.
In 2022, the government implemented a floating tariff model for nitrogen fertilizer plants, linking gas prices to global urea rates—both for domestic supply and exports.
Prime Minister Mostafa Madbouly had issued a December 2024 decree compelling companies in free and economic zones to pay for gas in Egyptian pounds, calculated at the previous month's US dollar rate. The mandate adds further pressure on businesses already struggling with currency volatility and rising energy costs.
