Egypt has scrapped subsidised natural-gas pricing for new industrial plants, in a move marking the latest phase of its long-running energy-market reform programme. The government will now sell gas to factories at a market-linked rate based on the weighted average cost of domestically produced and imported gas—via pipelines and LNG—plus a US$1 surcharge per million British thermal units (MMBtu). Prices will be reviewed quarterly to reflect global market trends, a senior official told Asharq Business with Bloomberg.
The decision, effective from 16 September 2025, introduces higher tariffs across industrial sectors. Fertiliser producers will now pay $4.50/MMBtu for nitrogen-based output and $5.75/MMBtu for non-nitrogen fertilisers and steel; cement makers face a steep $12/MMBtu charge, while other industries will pay $4.75/MMBtu. Gas for electricity generation is set at $4/MMBtu, and brick kilns at EGP 210.
The policy shift has already triggered friction between the state-owned EGAS and several fertiliser manufacturers, including Abu Qir, Helwan, KIMA and Alexandria Fertilisers. The companies dispute EGAS’s application of an additional dollar per MMBtu under a pricing formula linked to export volumes and global fertiliser prices—raising their effective rate to $6.20/MMBtu. They argue that the Cabinet decree authorised only a $1 rise to $5.50/MMBtu, without further surcharges.
Economists say the reform aligns with Egypt’s wider fiscal-sustainability drive and its commitments under the IMF-backed economic programme, which calls for the gradual removal of energy subsidies by 2025. Yet it comes at a sensitive moment for energy-intensive industries, already facing high input costs and weak global demand.
For manufacturers, the quarterly review clause adds a new layer of uncertainty. Analysts warn that the loss of subsidised energy could squeeze margins in fertiliser, steel and cement, potentially raising export prices and domestic inflation. Others see it as a long-delayed step toward transparency and market efficiency that could attract more investment into Egypt’s gas sector over time.
