Egypt has moved to raise natural gas prices for key industrial users, reflecting an ongoing effort to scale back subsidies as higher import costs and falling local production continue to strain the country’s energy sector.
A government directive released on Sunday confirmed that the revised tariffs took effect in May, affecting energy-heavy industries including cement, iron and steel, fertiliser production, and petrochemicals.
On average, gas prices have climbed by around $2 per million British thermal units (mmBtu). Cement manufacturers will now pay $14 per mmBtu, while iron and steel producers, along with non-nitrogen fertiliser and petrochemical companies, will be charged $7.75.
Other industrial consumers, such as plants using ethane and propane blends, will face rates ranging between $6.50 and $6.75.
Household consumers are not included in the adjustment, as their pricing remains tied to existing contractual arrangements.
The decision aligns with ongoing reforms under Egypt’s $8 billion programme with the International Monetary Fund, which requires authorities to gradually reduce energy subsidies and adopt more market-oriented pricing structures.
Over the past two years, Egypt’s energy situation has worsened significantly. Once a net exporter of natural gas, the country has increasingly depended on imports due to declining output from major fields such as the Zohr gas field.
This shift has pushed the government to rely more on costly liquefied natural gas (LNG) imports and supplies from regional partners.
Meanwhile, heightened geopolitical tensions in the Middle East have further constrained supply and driven up global energy prices, sharply increasing Egypt’s import expenses. Monthly spending on gas imports has nearly tripled, while overall energy costs have more than doubled in recent months.
A weakening currency has added further pressure, as repeated devaluations since 2022 have made dollar-priced imports significantly more expensive, straining foreign reserves and public finances.
For manufacturers, the higher gas tariffs are expected to raise operating costs across several key sectors.
Cement and steel producers, both central to construction activity, may pass on increased expenses, which could slow down building projects.
Fertiliser manufacturers, which are crucial to agriculture, could also transmit higher costs into the farming sector, potentially contributing to food price inflation domestically and in neighbouring markets.
Earlier, the government had already increased fuel prices by up to 17% in March, reinforcing its broader shift toward cost-reflective energy pricing.
Although these reforms may place short-term pressure on businesses and households, analysts view them as necessary steps to stabilise public finances and restore investor confidence in one of Africa and the Middle East’s largest economies.