Ahmed Kamel – Egypt Daily News
In a move reflecting mounting pressures on the national energy budget, the Egyptian government has raised the price of natural gas supplied to factories by 21%, effective from September 16, 2025. According to four industry sources, the new rate increases the cost by one dollar per million British thermal units (MMBtu), bringing it from $4.75 to $5.75 per MMBtu across most industrial sectors.
The price adjustment affects a wide range of industries, including fertilizers, iron and steel, and cement. While these sectors are typically governed by special pricing formulas due to their high energy demands, they are not exempt from the increase, sources said.
The decision follows a recent study submitted by the state-owned Egyptian Natural Gas Holding Company (EGAS), which estimates that the cost of delivering one million BTUs of natural gas to local factories now stands at around $6. This figure reflects rising import bills driven by increasing reliance on liquefied natural gas (LNG) imports to meet domestic demand.
Prime Minister Mostafa Madbouly confirmed the hike last week, framing it as part of a broader fiscal strategy. “We approached this decision with a comprehensive vision,” Madbouly said, noting that Egypt still ranks among the cheapest countries in the region for industrial gas pricing, after only Saudi Arabia and the UAE, both major energy producers.
“The state continues to shoulder a significant portion of the gas subsidy,” Madbouly added. “This is a modest increase aimed at gradually reducing the substantial burden on public finances.”
Egypt’s industrial sector currently consumes around 2.1 billion cubic feet of gas per day, out of a national total of 6.2 billion cubic feet. However, local production hovers between 4.1 and 4.3 billion cubic feet daily. This shortfall, particularly pronounced in the summer months, drives the need for costly imports, pushing the daily gap to as much as 7 billion cubic feet.
Initially, the government had planned to implement the gas price hike in August 2025 but postponed the move amid concerns over inflationary pressure and industrial competitiveness.
Under the current pricing structure, the government differentiates gas tariffs based on industry type. For example, nitrogen-based fertilizer plants pay a minimum of $4.5 per MMBtu under a special pricing formula. Non-nitrogen fertilizers and iron and steel producers pay $5.75 per MMBtu, while cement manufacturers face the highest rate at $12 per MMBtu. Other industrial users are charged $4.75, and power generation stations receive gas at $4 per MMBtu.
Industries such as fertilizers and petrochemicals, which account for 35% to 40% of industrial gas consumption are particularly sensitive to changes in energy costs, as gas constitutes up to 85% of their production expenses.
As Egypt grapples with balancing industrial growth and fiscal responsibility, the latest move signals a shift toward a more cost-reflective energy policy, even as the government maintains that subsidies, while reduced, remain substantial. The coming months will reveal how manufacturers, especially energy-intensive ones, adapt to the higher input costs in a challenging economic environment.
