Cutting gas to factories saves $500 million a month, says cabinet source

A Cabinet source familiar with industrial gas supplies said the government’s decision to cut natural gas deliveries to several factories would save around $500 million a month in import costs. The cuts are initially expected to remain in place for two 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. It initially reduced gas supplies to a number of factories by 20%, then deepened the reduction to 33% on Sunday.

The source, who requested anonymity, told Al Manassa that the cuts apply to fertilizer and iron and steel factories, while food and textile producers are exempt.

The source acknowledged that the decision would affect production and exports in these sectors, but said rising global energy prices had left the government with little choice but to reduce its gas import bill.

A source familiar with gas imports at the Ministry of Petroleum and Mineral Resources had previously told Al Manassa that the estimated cost of importing liquefied natural gas (LNG) in November had jumped around 185% year on year to approximately $2.21 billion. The increase was driven by higher global gas prices and disruptions to shipping and maritime traffic amid geopolitical tensions.

The latest cuts follow the government’s decision to reduce 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.

The Cabinet source said the cuts would initially last two months, after which the government would decide whether to extend them. The government is also banking on an end to the US-Israeli war on Iran by year-end to ease global oil and gas prices.

The source said the government was closely monitoring developments in global energy markets, the cost of securing LNG shipments and the needs of different production sectors. The immediate priority, the source added, was to secure the country’s gas and electricity supplies while limiting pressure on foreign currency reserves until conditions in the region stabilize and energy markets return to more balanced levels.

Any decision to maintain the cuts or restore previous supply levels will depend on global energy prices and the availability of foreign currency to finance gas imports, the source said.

Maintaining subsidized fertilizer supplies

Meanwhile, Saqr Abdel Fattah, deputy head of the House of Representatives’ Agriculture and Irrigation Committee, said the cuts to natural gas supplies to fertilizer factories would not affect the government’s or farmers’ allocations of subsidized fertilizer. He stressed that companies remained committed to supplying their designated quotas.

The cuts would not affect strategic crops, but could have a greater impact on fruit and vegetable crops, Abdel Fattah told Al Manassa. The parliamentary Agriculture Committee is therefore monitoring the situation in coordination with the government to ensure farmers are not adversely affected.

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.