Egypt has introduced new restrictions on natural gas supplies to several energy-intensive industries amid disruptions in global energy markets and a sharp increase in international liquefied natural gas (LNG) prices. Initially targeting fertilizer and methanol producers, the measures were subsequently extended to include iron and steel producers. The decision reflects mounting pressure on the country's energy supply and the rising cost of securing imports.

This Factsheet examines the drivers behind the restrictions, companies' responses, and their potential implications for industrial production, domestic markets, and Egypt's export performance.

• Disruptions to LNG shipments through the Strait of Hormuz have intensified competition for global gas supplies and driven international prices higher. Asian spot LNG prices averaged $21.5 per million British thermal units (MMBtu) between March and October 2026, marking an approximately 80% year-on-year increase. Meanwhile, European TTF spot prices rose by nearly 70% over the same period, averaging close to $20/MMBtu.
• The government initially introduced a 20% reduction in natural gas supplies to fertilizer and methanol producers on November 1. On 8 November, the reduction was increased to 33%. The restrictions were subsequently extended to Ezz Steel, which reportedly received notification of a 30% reduction in its gas supplies.
• The current restrictions follow a similar episode in June–July 2024, when the government reduced gas supplies to fertilizer and petrochemical plants by approximately 20–30%, and several producers temporarily suspended operations. At the time, disruptions to regional gas supplies, including interruptions in supplies from neighboring countries, coincided with an unprecedented heatwave and a surge in electricity consumption.
• During fiscal year (FY) 2023/24, Egypt's total natural gas consumption reached approximately 50.27 million tons of oil equivalent (Mtoe), of which industrial activities accounted for around 13.5 Mtoe, representing approximately 27% of total consumption. Natural gas is particularly important to industrial production as a feedstock rather than merely an energy source. Meanwhile, approximately 59% of domestic natural gas consumption was allocated to electricity generation.
• Fertilizer manufacturing is the most gas-intensive industrial activity in Egypt. In FY2023/24, the sector consumed approximately 4.9 Mtoe of natural gas, accounting for 36.5% of industrial consumption. It was followed by iron and steel (14.7%), food industries (8.3%), and chemical and petrochemical industries (8%). Unlike many other industries, fertilizer production relies on natural gas as an essential feedstock for manufacturing ammonia and urea, making it particularly vulnerable to supply disruptions.
• Egypt's fertilizer industry is a major contributor to domestic agricultural supply, with total production reaching approximately 12 million tons in 2023. However, reduced gas allocations could constrain production and limit the availability of fertilizers in the domestic market. This may put upward pressure on local fertilizer prices, increasing agricultural production costs and potentially translating into higher prices for food products, adding to inflationary pressures.
• Egypt remains a major player in international fertilizer markets. In 2025, the country exported approximately $2.2 billion worth of fertilizers, accounting for around 2.2% of global exports and ranking 9^th among the world's leading exporters. Fertilizers also ranked among Egypt's top 10 exported product groups. Notably, fertilizer exports declined by approximately 15% in 2024 following earlier gas supply restrictions. Further production constraints in 2026 could weaken export performance, reduce foreign currency inflows, and affect Egypt's position in international fertilizer markets.

By: Amina Hussein