Egypt introduces new natural gas pricing mechanism for industrial sectors
Updated 12/4/2024 7:24:00 AM
Arab Finance: The Egyptian Prime Minister Mostafa Madbouly has issued two key decisions regarding the pricing and payment mechanisms for natural gas, as outlined in the Official Gazette.
These decisions aim to streamline pricing and payment processes for government electricity production companies and industrial activities.
The first decision sets the selling price of natural gas supplied to generate electricity at $4 per million thermal units for government electricity production companies and other entities.
This move is intended to stabilize energy costs and ensure a predictable pricing model for electricity generation in the country.
In a second, separate decision, Madbouly introduced a change in the way industrial activities will pay for their natural gas consumption.
Starting December 1st, the cost of gas for these activities will be calculated based on the average price of the USD as announced by the Central Bank of Egypt (CBE) during the month preceding the consumption period.
This decision replaces a previous rule that had been in effect since 2004, which required industrial activities outside free and economic zones to pay gas prices in EGP according to the exchange rate at the time the invoice was issued.
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