Egypt Daily News – The Ministry of Petroleum and Mineral Resources is planning to raise household natural gas prices by 33% to 40% starting this month, depending on consumption tiers. This move raises the question: to what extent will the increase add to inflationary pressures in the coming period?
Two economists said that a hike in household gas prices will undoubtedly have a negative impact on inflation rates, as it directly affects household spending and living standards.
A source from a state-owned gas company previously told Masrawy that the decision had been made to raise household natural gas prices by between 1 and 2 Egyptian pounds per cubic meter depending on the consumption tier, with the new rates applied to June bills.
New Price Hike
Yomn El-Hamaki, Professor of Economics at Ain Shams University, said any new increase in gas prices will inevitably reflect negatively on inflation.
She added that if the reports about the government seeking to raise home gas prices are accurate, it contradicts recent official statements about energy price stability, especially after earlier increases. She also noted that global energy prices are currently declining, which does not justify new price hikes at this time.
Last month, Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) announced that annual urban consumer inflation rose to 13.9% in April 2025, up from 13.6% in March.
The inflation uptick came after the Fuel Pricing Committee decided in April to raise the price of the 12.5 kg household butane gas cylinder from EGP 150 to EGP 200, the commercial cylinder from EGP 300 to EGP 400, and increased all grades of gasoline and diesel fuel.
Feeding Inflation
El-Hamaki explained that not only are global gas prices falling, but forecasts also suggest further declines, especially with OPEC+ increasing energy production, efforts to resolve the Russia-Ukraine conflict, and easing regional tensions with Iran. These developments all point toward a downward trend in global energy prices.
She warned that local reports about possible price hikes in household gas feed into inflationary expectations, creating uncertainty among the public. “If there is no real intention to implement these increases, was the goal just to test public reaction?” she asked.
She also warned that such signals can harm inflation stability and consumer confidence, especially as Egyptians’ purchasing power continues to erode—posing broader risks to the overall economy.
Alaa El-Idrisi, a member of the Egyptian Society for Political Economy, Statistics, and Legislation, agreed that any increase in gas prices will certainly impact inflation rates.
He clarified that the impact goes beyond household use, affecting three main areas: residential natural gas, LPG cylinders (which have already seen price hikes), and industrial gas used in factories.
El-Idrisi noted that industrial gas prices have risen considerably and that factories are notified periodically of these changes, unlike household and LPG prices, which are publicly announced by the Fuel Pricing Committee.
He confirmed that these price shifts directly affect consumers and therefore inflation, noting that any rise in energy prices puts pressure on family budgets and living standards. However, he added that household natural gas remains cheaper compared to LPG cylinders, which are sometimes sold unofficially at prices reaching EGP 300.
He concluded that if the gas price increase is implemented, its impact on inflation will likely be limited compared to the more significant jumps already seen in cylinder prices, though inflation could still rise by the end of this month.
