The government is moving to increase the price of natural gas supplied to factories by more than one dollar to reach $8.50 per million British thermal units (BTU) starting May, according to a source familiar with the gas pricing file at the Ministry of Finance who spoke to Al Manassa.
The planned hike reflects the government’s shift toward aggressive subsidy rationalization after the US-Israeli war on Iran drove global crude prices up and strained the state budget. By targeting energy-intensive heavy industries while exempting food production, Cairo aims to offset mounting debts to foreign partners and rising import costs without triggering a total collapse in consumer purchasing power.
The source, who requested anonymity, explained that the new increase will include all industrial sectors, such as iron and steel, petrochemicals, and cement, with the exception of food industries and spinning and weaving, aiming to reduce the decision’s impact on the prices of basic commodities for citizens.
At the beginning of April, the Ministry of Industry raised gas prices supplied to fertilizer plants by about 21% to reach $8.50 per million BTU, in light of the increase in global crude oil prices after it exceeded the $100 per barrel mark recently.
He added that recent regional tensions contributed to increasing pressure on the general budget, especially with the rising energy import bill, which prompted the government to adopt a policy of gradually adjusting the prices of some goods and services, led by gas, to alleviate the financial burden without causing a strong shock to the industrial sector.
The source expected that the new increase would lead to higher production costs in a number of heavy industries, which may be partially reflected in the prices of some products in the local market, especially in the construction materials sectors and related industries.
The exception of the food, spinning, and weaving industries comes within a government trend to maintain the stability of basic commodity prices and reduce inflationary pressures on citizens, in parallel with continuing to support sectors most closely linked to daily consumption, the source said.
A government source had told Al Manassa in a previous report that the current energy rationalization plan would only contribute to saving 5% of the petroleum energy consumed, and that it would become more effective if energy prices were raised for energy-intensive industries.
In another context, NewMed Energy, a partner in the Cypriot offshore Aphrodite field, said today that the field has signed a 15-year agreement to sell natural gas to the Egyptian Natural Gas Holding Company (EGAS).
NewMed said it signed binding terms to supply all extractable natural gas from the Aphrodite reservoir to Egypt’s state-owned EGAS, with an option to extend the agreement for another five years.
At the beginning of this month, a source familiar with the petroleum sector confirmed to Al Manassa that the ministry is conducting negotiations with the Cypriot Ministry of Energy to increase the Egyptian market’s share of Cypriot natural gas, after Egypt signed a framework agreement at the end of March to maximize the benefit from Cypriot gas resources by transporting them to Egypt to meet local demand and utilize Egyptian infrastructure.
