Egypt will reduce the price of natural gas to steel and iron factories to $4.5 per 1m thermal units from the current $7, Industry Minister, Tarek Kabil, informed, according to Reuters. The new reduced price will be offered only to those factories that currently operate at full capacity, Kabil added.
The reduction brings gas prices for the industries back to their 2014 levels, before prices were hiked by 30%-75% as part of a broader government plan to cut subsidies, including those to heavy industry. High gas prices have led to factories operating at only 20% of their production capacity.
Further, natural gas shortages forced state-owned EGAS to ration gas supplies to industry during months of peak consumption, crippling production and hampering Egypt’s economic recovery, wrote Zawya. Production at steel firms had been halted for four months last year due to gas shortages.
In December, the Egyptian government stated it would relax its commitment to abolish subsidies on gasoline, diesel and natural gas, as lower global oil prices and the discovery of a massive offshore gas field meant it could move slower on the policy.