The Ministry of Petroleum has started arbitration proceedings against the Egyptian Fertilizer Company, owned by businessman Nassef Sawiris, after the company refused to pay the new higher prices demanded by the government.
An official in the ministry stated that the decision to resort to arbitration came after the failure of negotiations over the hikes in prices of natural gas, which is currently US$1.5 per million British thermal units.
The official said that such a low price was unacceptable given the government's decision to adjust pricing of Egyptian gas to correspond to international rates.
The source added that the Egyptian Fertilizer Company already purchases natural gas at prices lower than its counterparts inside Egypt while exporting their products at international prices.
Sawiris suggested applying the new prices only when the price per ton of fertilizer reachesa certain level, an idea rejected by the ministry. According to the source, the Egyptian Fertilizer Company exports around 1.3 million tons of fertilizers annually.