Egypt raises natural gas prices for energy-intensive industries

The Egyptian government has approved a new increase in natural gas prices for energy-intensive industrial activities, effective from May 1, according to a statement cited by Al Ahram. 

The move is part of the government's efforts to restructure the energy pricing mechanism for the industrial sector. Factory gas prices are set based on the nature of each industrial activity, with a minimum price of $6.5 per million British thermal units (mmBtu).

Prices for the cement sector have been raised to $14 per mmBtu, up from $12 previously, while prices for iron and steel, non-nitrogen fertilisers, and petrochemicals have increased to $7.75 per mmBtu from $5.75. Meanwhile, all other industrial sectors will pay $6.75 per mmBtu.

The decision clarified that these prices do not apply to consumers under existing gas supply contracts with pre-agreed pricing formulas, who will continue to be charged under those terms. The Ministry of Petroleum and Mineral Resources will determine gas pricing for petrochemical feedstock, particularly ethane-propane mixtures, using a specified pricing mechanism.

The move comes amid a sharp rise in Egypt’s natural gas import bill following the outbreak of the US-Israeli conflict with Iran in late February. In March, PM Mostafa Madbouly said the monthly import bill had surged from $560mn before the conflict to around $1.65bn, driven by higher global energy prices.