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Sunday, 10 July 2016

EGAS says selling gas at USD 4.5 per MMBtu is a “waste”

EGAS has refused to sell natural gas to factories at the USD 4.50 bn per MMBtu requested by the Federation of Egyptian Industries, saying it would be a “waste” of the nation’s natural resources. An EGAS source told Al Borsa the country already imports around 1.2 bcf of natural gas per day at an average cost of USD 7.5 per MMBtu, so selling it below cost would effectively be a subsidy to factories borne by the state. Similarly, the cost of producing natural gas domestically rings in at an average of about USD 6 per MMBtu. Fertilizer producers get gas at USD 4.50 per MMBtu because they channel their output to the local market and support the agriculture sector domestically, the source explained. The Trade and Industry Ministry had said it was hoping to set gas pricing to all factories at USD 4.50 per MMBtu by September.

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