The government has authorized a 17% increase in natural gas supplies to fertilizer and petrochemical plants this month, a strategic maneuver aimed at bolstering hard currency reserves while simultaneously collecting higher energy fees from industrial producers.
Gas flows to the sector jumped to 730 million cubic feet per day (mcf/d) in April, up from 620 mcf/d in March, according to a source familiar with the distribution portfolio at the Egyptian Natural Gas Holding Company (EGAS). Speaking to Al Manassa on condition of anonymity, the source attributed the surge to a relative recovery in domestic production and imports as regional tensions begin to stabilize.
The supply hike brings the sector within its required threshold of 700–750 mcf/d. These volumes are critical for manufacturers to meet export obligations, which have climbed 12% this year to a total of $2.803 billion.
However, the government’s pivot to favor the fertilizer industry comes despite a persistent 32% deficit between domestic gas production and total local consumption—a gap the state is struggling to bridge through costly imports.
According to the EGAS source, the decision is as much about fiscal policy as it is about industrial output. Under a new pricing formula implemented this month, the government is leveraging the uptick in export volumes to raise the price of gas supplied to these factories.
The source emphasized that any future expansion in export contracts will trigger an immediate upward adjustment in the monthly gas bills for those plants. “The pricing of gas for export-oriented factories differs from those producing for the domestic market, particularly as global urea prices soar,” the source said.
In recent weeks, global urea prices have surged from a range of $450–$480 per ton to an average of $750 per ton—a staggering increase of up to 66%.
Yet, while the state and industrial giants eye record-breaking export revenues, the domestic economy is bearing the brunt. Local fertilizer prices skyrocketed this month alone, jumping from 23,000–34,000 Egyptian pounds per ton. Factory owners have defended the price hike, citing the rising cost of gas resulting from the ongoing US–Israeli war on Iran.
