Gas subsidies for Egypt’s industrial sector jumped 16% in the third quarter of 2025, reaching $525 million, as state spending on imported fuel soared. The rising cost has intensified government calls to dismantle the support system for manufacturers.
A senior official at the Egyptian Natural Gas Holding Company EGAS, who requested anonymity, told Al Manassa the Q3 figure marked a $75 million increase over the same period last year. “This isn’t the first increase this year,” the source said, noting that second-quarter subsidies also rose, totaling approximately $495 million.
In September, an informed EGAS source previously revealed to Al Manassa, the government had informed energy-intensive industries of a minimum $1 per MMBtu price hike, lifting rates from the prior $4.50–$5.70 band.
By mid-October, Kamel Al-Wazir, minister of industry minister publicly hinted at the need for a gradual removal of gas subsidies. The Egyptian Initiative for Personal Rights praised the shift, denouncing the preferential pricing as unfair to ordinary citizens who face high fuel costs.
The EGAS official attributed the spike largely to import dependence, stating that factories consume between 1.9 and 2.1 billion cubic feet of gas daily, the majority sourced externally—including liquefied natural gas (LNG) and gas from Israel.
Egypt’s petroleum imports hit historic highs in the last fiscal year, driven by ballooning bills for LNG, gasoline, diesel, and mazut.
The petroleum ministry now contracts over 100 LNG shipments annually, often at prices above $12 per MMBtu, according to the EGAS official. These import costs spurred the ministry to implement a quarterly automatic pricing mechanism, linked to global energy markets and local supply metrics.
What factories might pay next
The local-market-serving factories will likely pay between $7 and $8 per MMBtu, while export-oriented plants could see rates rise to $12, indexed to their export volumes and international product pricing, another EGAS official told Al Manassa.
He emphasized that the “fair price” will fluctuate depending on Egypt’s import ratio during each quarterly review. Currently, about 40% of gas is imported, with the remaining 60% sourced domestically.
The official outlined that locally produced gas costs $5 to $7 per MMBtu, while imported LNG averages $12 to $14. Gas piped from Israel is priced at $7.70.
The petroleum ministry aims to increase daily domestic output to 6.6 billion cubic feet (bcf/d), the level of peak production originally reached in 2021 with the Zohr field beginning operations. In 2022/23, unexpected water influxes into its reservoir, caused Zohr gas output to dramatically plummet to 2.4 bcf/d.
As of June 2025, daily production still averages around 4.02 bcf/d, nearly a third short of the ministry's target. This year-on-year sluggish recovery has prompted the government to increase incentives for international coastal exploration, and expand import drives to cover shortages.
Extraction costs vary widely based on geography, a senior exploration official at the Egyptian General Petroleum Corporation told Al Manassa. Gas from deepwater fields, which now supply 80% of Egypt’s output, costs $6 to $7 per MMBtu, depending on the depth and infrastructure requirements, he added.
Onshore gas, primarily from desert concessions, is cheaper—$5 to $6 per MMBtu—and accounts for 20–25% of national production, explained the EGPC official.
Foreign firms are increasingly favoring deepwater zones, the official added, citing their scale and profitability.
