Egypt to Reconsider New Gas Pricing Policy

Egypt’s Prime Minister (PM) Moustafa Madbouli announced that the cabinet has approved the adoption of ministerial committee recommendations to reconsider and review gas prices for each industrial activity, in the light of economic, environmental, political and social changes within the local market.

The ministerial committee was formed in accordance with PM’s decree no. 1994 for 2019.

In press statement, Madoubli stressed that the cabinet has agreed to the gas prices reached by the ministerial committee in this regard; to be $ 6 per million British thermal units (mBtu) for the cement industry, and $ 5.5 per mBtu for industries like: iron, steel, aluminum, copper, ceramics and porcelain.

Considering other industries, PM clarified that the natural gas sale prices stated in the decisions no. 1162 of 2014, 1685 of 2014, 1021 of 2015, 1556 of 2019 and 1557 of 2019 will continue to be implemented.

Moreover, he pointed out that these prices will be reviewed every 6 months, in the light of international price changes as well as economic and social variables, by the competent ministerial committee.

Noteworthy, Egypt embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

Since 2014, the state committed to lift energy subsidies gradually over five years. It floated its legal tender in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).