Egypt will halt power cuts from 3rd week in July until end-summer under $1.18 bln plan: PM

Ahram Online , Tuesday 25 Jun 2024

Prime Minister Mostafa Madbouly said the state will import mazut and natural gas shipments valued at around $1.18 billion to stop nationwide power cuts from the third week of July till end-summer.

Mostafa Madbouly
A still photo of Egypt's Prime Minister Mostafa Madbouly during a press conference on Tuesday 25 June, 2024.


In a press conference on Tuesday, Madbouly apologized that power cuts across the nation will continue for three hours per day this week and will return to two hours starting next week.

He noted that the current crisis was triggered by a stoppage in one of the natural gas stations in "a neighbouring supply country" for 12 hours.

Madbouly noted that Egypt is connected to this "neighbouring supply country"  as part of a regional energy network.

Egypt liquifies and exports surplus gas through this network during winter and imports it during summer, explained Madbouly.

The prime minister said Egypt stopped exporting natural gas during summer in the past three to four years and has been importing a fair amount of natural gas to cover domestic needs.

“Within the framework of the state’s plan to become a regional hub for energy trading, especially by liquifying and exporting gas, Egypt is part of a regional network that links it with neighbouring states,” Madbouly stated.

He added that the state decided not to use its natural gas reserves amid the stoppage in the "neighbouring supply country," opting to wait for the station to resume operation.

“A domino effect could have happened and power stations could have gone out of service one after another,” Madbouly explained.

Change of plans

In the press conference, Madbouly noted that the government's initial goal was to end power cuts by the end of 2024.

However, per presidential directives, preemptive measures have been implemented to reduce electricity interruptions during the summer season, said the prime minister.

This week, authorities have implemented three-hour nationwide power cuts - up from two-hour power cuts in place since 2023 -  amid a scorching heatwave and high local electricity consumption.

The government said the increased power consumption added pressure on the natural gas supply needed for power generation.

It explained that the additional hour of power cuts was necessary to maintain the operational efficiency of the national electricity transmission grid and natural gas networks.

Supply influxes

By next week, 300,000 tons of mazut valued at $180 million will arrive in the country to operate electrical power stations, Madbouly said.

The remaining $1 billion worth of either mazut or natural gas will arrive on shipments by the third week of July, enabling the country to end power cuts until summer ends, he added.

The prime minister that further amounts would be imported in case of further heatwaves in the coming months.

During the last few months of 2024 after summer, the government will also work on halting power cuts altogether or reducing their duration, Madbouly stated.

New power-saving plan

Madbouly announced a new power-saving plan that mandates all commercial shops nationwide close at 10pm starting in July.

He added that supermarkets, pharmacies, and restaurants would be allowed to open until 1am.

Madbouly also called on citizens to support the government’s endeavours to save power by rationalizing energy use inside homes.

In 2023, Egypt’s liquified natural gas (LNG) exports decreased by 51.8 percent, amounting to 3.52 million tons compared to 7.3 million tons in 2022, according to a report released last January by the Organization of Arab Petroleum Exporting Countries (OAPEC).

In 2022, amid to a foreign currency shortage, Egypt directed 80 percent of its LNG exports to Europe, which seeks to reduce Russian pipeline gas imports.

Egypt achieved self-sufficiency in natural gas in 2018 and reduced its imports to nearly zero by 2019.

However, it has resorted to importing mazut and natural gas to meet exceptional demand for electricity in the summer of 2023.

Since 2022, Egypt has implemented a nationwide energy consumption rationing plan to save natural gas and redirect it towards exports to generate foreign currency.

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