Gas supply cuts to fertilizer plants threaten one-third of production
Egypt has increased cuts to natural gas supplies to fertilizer plants to 33%, raising the prospect of production declines of a similar scale and threatening manufacturers’ ability to meet domestic demand, fulfill export contracts and maintain sales.
The latest reduction adds 13 percentage points to the 20% cut imposed in September, as rising global energy prices and disruptions to oil and gas supplies put further pressure on the government to curb consumption and public spending.
Misr Fertilizers Production Company (MOPCO) announced Sunday that it had received official notification of the new 33% reduction in natural gas supplies. Mohamed El-Khashen, chairman of Evergrow Fertilizers, separately told Al Manassa that the same notification had been sent to five other producers: Egyptian Fertilizers, Abu Qir Fertilizers, Alexandria Fertilizers, Helwan Fertilizers and KIMA.
In a disclosure to the Egyptian Exchange on Sunday, MOPCO said it was managing its operations and production using the available gas supplies to ensure business continuity. However, four sources familiar with the fertilizer industry warned that the deeper cuts would force plants to reduce output by about one-third, threatening companies’ ability to fulfill contracts and meet export commitments in the coming months.
Global energy markets have been hit by a wave of price increases, which has intensified since September amid the fallout from the US-Iran war and disruptions to oil and gas supplies. The developments prompted the government to draw up a new plan to rationalize consumption and public spending over the coming months.
A board member of a state-owned fertilizer company said gas shortages would force it to operate only two of its three plants in November.
The source, who requested anonymity, told Al Manassa that a production decline of about one-third would directly affect sales volumes, revenues and export contracts in the final quarter of the year.
An official familiar with gas imports at the Ministry of Petroleum had previously told Al Manassa that November’s LNG import bill was expected to rise 185% year on year to $2.21 billion, driven by higher global prices and shipping disruptions amid geopolitical tensions.
The latest cuts come after the government reduced allocations for petroleum product subsidies in the current fiscal year to approximately 15.8 billion Egyptian pounds ($291 million), down from 75 billion pounds ($1.38 billion) in the previous fiscal year.
Domestic stability
Evergrow’s El-Khashen expects production to fall by roughly the same 33% as the gas supply cut, given that natural gas is both a key input and the industry’s primary raw material.
Nevertheless, El-Khashen sought to reassure the domestic market, telling Al Manassa that the production decline was unlikely to push fertilizer prices up in Egypt. He said the state maintains tight control over trading and distribution to protect farmers.
He warned, however, that the impact on foreign markets could be more serious. “Egypt is a major player in the global nitrogen fertilizer market. A decline in export volumes threatens to reduce Egyptian producers’ market share and weaken their competitiveness,” he said.
Egyptian fertilizer exports totaled approximately $2.53 billion between Jan. and Sept. 2026, making fertilizers the leading export category in the chemicals and fertilizers sector, according to data from the Export Council for Chemical Industries and Fertilizers.
Uneven impact
Nouran Ahmed, a fertilizer and consumer-sector analyst at Naeem Brokerage, expects the gas cuts to weigh on fertilizer companies, although the impact will vary among producers, as it did when supplies were almost completely halted last year.
Ahmed told Al Manassa that a further decline in global urea prices could also squeeze fertilizer companies’ profit margins. This could have a greater impact on their operations than the gas shortage itself.
Petrochemical sector
While fertilizer producers face direct constraints from reduced gas allocations, the impact on petrochemical manufacturers depends on the availability of different feedstocks.
Jihad El-Masarawy, a financial analyst at the same brokerage, said Sidi Kerir Petrochemicals Company (SIDPEC) would be affected differently from fertilizer producers such as Abu Qir Fertilizers and MOPCO, which rely directly on natural gas.
SIDPEC instead uses ethane and propane as feedstocks, meaning any decline in their availability could reduce its operations and output. Its performance in the coming period will also depend on whether global petrochemical prices rise faster than raw material costs.
SIDPEC’s financial results for the first nine months of 2026 showed that revenue growth had not translated into comparable gains in profitability. Revenue rose 34.8% year on year to approximately 14.7 billion pounds ($271 million), while gross profit increased by just 16.4% to 2.36 billion pounds ($43.5 million). The cost of sales climbed about 39% to approximately 12.4 billion pounds ($229 million), outpacing revenue growth.