Industry specialists applaud a recent decision by the Egyptian government to raise the price of gas for industrial facilities.
The decision, they said, raises the price of gas delivered to the factories to fair levels.
“This is clear in the light of the current rise in the cost of gas production,” Mohamed Saad Eddin, the head of the Liquefied Gas Investors’ Association, said.
“The price of the gas is still very appropriate, even after the latest raise,” a local newspaper quoted him as saying.
The government’s decision to raise the price of the gas for industrial facilities came hard on the heels of a rise in international gas prices and a marked growth in international demand for the fuel.
The government raised the price of each 1 million British thermal units (BTUs) of gas to $5.75, instead of $4.5 a million units in the past.
The rise in international gas prices is only part of fluctuations overwhelming prices in the international market.
These fluctuations are induced by the Covid-19 pandemic which is disrupting the international supply chains.
Nonetheless, the decision to raise the price of the gas for factories is causing anger among producers, especially those who depend on heavy gas consumption for production.
Walid Gamal Eddin, the head of the Building Materials’ Export Council, said he and fellow manufacturers were surprised by the government’s decision to raise the price of the gas.
“The rise in the price of the gas will force factory owners to raise the prices of their products in the local market,” Gama Eddin said. “They will have to do this because the cost of production is rising.”
The Export Council, the independent guild of the nation’s exporters, is reportedly due to send a complaint to the minister of industry against the decision to raise gas prices.
One of the nation’s steel companies said the latest rise in the price of the gas would force it to raise the price of steel by 26 Egyptian pounds (roughly $1.50) per ton.
Nonetheless, Saad Eddin called for imposing tight supervision on producers who raise the prices of their products for what he described as ‘no reason’.
The government, he said, used to sell the gas to cement factories for $6 dollars per 1 million BTUs.
He added that the government also sold each 1 million BTUs to factories that rely heavily on gas for $5.5.
“However, when the Covid-19 pandemic erupted, the government had to slash the price of the gas to $4.5 per 1 million BTUs, in its bid to support the industrial sector,” Saad Eddin said. “This means that the latest raise makes the price of the gas even lower than the price in the pre-Covid-19 period.”
Meanwhile, leading economist Khaled el-Shafie called for offering support to the industrial sector in the coming period, against the background of rising production requirements’ prices.
“We are badly in need of increasing our production,” el-Shafie said. “An increase in production will benefit everybody, namely the producers and the consumers.”
