Petroleum and Mineral Resources Tarek El-Molla. Photo courtesy of Egyptian Petroleum and Mineral Resources Facebook page.
The under-consideration mechanism is expected to review the asking prices of natural gas for the industrial sector every three to four months with the aim of supporting local manufacturing that depends on natural gas, according to the minister.
El-Molla also said that the measure is being considered to set local natural gas prices in accordance with the global prices, the exchange rate, and the operation coasts.
“The government does not consider natural gas as a source of profit, but it looks at it as an energy resource that should be provided for convenient prices,” El-Molla said.
On Thursday, Egypt’s government raised the selling price of natural gas for the industrial sector by about 28 percent to reach $5.75 per one million British thermal units (BTUs) for high consuming industries; including iron and steel, cement, and fertilisers.
It also increased the selling price for other industries by 5.6 percent to record $4.75.
The increases are the first since the government reduced the price of natural gas for the industrial sector to support it amid the COVID-19 pandemic and its related impacts.
In March 2020, the government lowered the selling price of natural gas for industrial purposes to $4.50 per one million BTUs, down from $5.50.
In response to the announced increases, a number of EGX-listed companies working in manufacturing fertilisers, cement, and ceramics announced on Sunday that they will review the prices of their goods, saying that the rise will definitely increase the operation costs and the final product prices.
Based on the IMF-backed economic reform programme that Egypt has been applying since November 2016, the country has been slowly phasing out subsidies on fuel prices in the past few years.
Consequently, Egypt has been applying the automatic pricing mechanism for fuel resources since mid-2019, through which fuel prices are reviewed every three months in light of global fuel prices.
In October, the petroleum ministry raised the price of fuel for the third time during 2021 by 25 piasters.
Accordingly, the price of 80, 92, 95 octane fuels were set at EGP 7, 8.25, and 9.25, respectively, while diesel fuel price remained at EGP 6.75