Minister of Petroleum Sherif Ismail said last week that the government would allow firms to import natural gas independently through the government network for the first time. The move came in an attempt to redress the energy-supply shortages that have prompted energy-intensive industries to cut back on their production as a result of increased domestic consumption in the country. Companies had previously relied upon the government for their energy supplies and had been prevented from importing natural gas independently. “If the private sector wants to import natural gas at its expense, we have no problem with it,” Ismail told Reuters last week. He added that companies would be allowed to use the government's nationwide network for an unspecified fee. Egypt's recurrent energy shortages have caused damage to energy-intensive industries such as cement, ceramics, fertilisers and steel as they have complained that they have not been able to work at full capacity because of the gas shortages. As a result, they have petitioned the government to allow them to use coal as an alternative source of energy to run their factories. Last year, energy shortages cost the cement industry a loss of some 20 per cent (3.7 metric tonnes) in production capacity. Hossam Arafat, head of the General Division of Petroleum Products at the Federation of Chambers of Commerce, praised the move and described it as “unprecedented and daring,” but he doubted that companies would make use of it. Arafat said that if companies imported natural gas independently, they would buy it at the market price, whereas it was available from the government at heavily subsidised prices. “Firms might prefer to benefit from the energy subsidies offered by the government,” Arafat told the Weekly. “But let's wait and see,” he added. Arafat said that a decision of this sort should have been taken long ago, but it had needed the political will to do so. The decision was a move in the right direction, he said, and it would help direct energy subsidies away from those who did not need them. According to the monthly bulletin released by the cabinet's Information and Decision Support Centre (IDSC), Egypt's oil production declined by 1.5 per cent in November and exports lost 1.2 per cent of their value while local consumption of oil products increased by 0.7 per cent. Natural gas exports also decreased by 46 per cent to reach US$120 million in November 2013 compared to the same month last year. The country's total consumption of natural gas is about 5.2 billion cubic feet per day, the electricity sector's share accounting for 60 per cent and the industrial sector's quota being around 33 per cent. Minister of Trade and Industry Mounir Fakhri Abdel-Nour said last week that local supplies of oil and gas were currently insufficient to cover the needs of industry and household consumption. He said that the government was discussing permitting cement companies to use coal, but that the environment and tourism ministries opposed this. Abdel-Nour said that some 450 million cubic feet of gas per day could be saved if the cement companies used coal instead of gas.
