Egypt delays factory gas price hike to November
The government has postponed an increase in the price of natural gas supplied to factories, originally scheduled for the start of this month, until November.
The move is aimed at avoiding a new inflation wave that could add to public pressure, amid expectations that the automatic fuel-pricing committee will approve a gasoline price increase in October, a senior Finance Ministry source told Al Manassa.
The ministerial economic group recently discussed the impact of further service-price increases and decided to delay the factory gas hike to limit pressure on inflation and final product prices, and prevent a further escalation in public anger following electricity price increases in August.
The delay will give the industrial sector more time to absorb rising production costs, the source said. The government will reassess the situation in October ahead of the planned November increase and is considering linking the hike to global prices and the cost of imported shipments in a way that reflects factories’ ability to pay.
Late last week, the state statistical agency CAPMAS confirmed that monthly inflation was stable in August, while annual inflation fell to 12.7% from 13% the previous month.
The pricing decision comes as Egypt faces rising costs to fill a domestic gas supply gap, with the government seeking to boost local production and increase reliance on Israeli gas to reduce costly LNG imports. European prices rose above $1,000 per 1,000 cubic meters for the first time since December 2022, according to a source familiar with the matter at the Petroleum Ministry.
The Petroleum Ministry source said prices for LNG shipments under new contracts have doubled to between $25 and $28 per million British thermal units, up from $12 during the same period last year. That will raise the monthly import bill in 2027 to about $2 billion, compared with $600 million last year.
To help cover the domestic gas shortfall, the main options are to accelerate drilling and exploration, raise output from existing fields, and increase Israeli gas flows, the source said. The latter depends on Israel’s production and export capacity.
Egypt needs an average of 20 LNG shipments a month during the summer and about 15 in winter to cover the domestic gas consumption gap, according to the source.
In August 2025, NewMed Energy, a partner in Israel’s Leviathan natural gas field, announced a $35 billion agreement to export Israeli gas to Egypt, the largest export deal in Israel’s history. While the original contract called for Israel to export nearly 60 billion cubic meters of gas to Egypt through 2030, the amended agreement extends the arrangement through 2040 and requires Israel to export 130 billion cubic meters.
The Israeli gas export agreement, signed in 2019, links export prices to the global Brent crude price. The latest amendment retained the same pricing mechanism, with some changes concerning later stages of the agreement. According to press reports, the current gas price is $7.7 per million British thermal units