EGAS looks to make nice with manufacturers with new incentive package including lower fines, easier payment terms for natural gas
EGAS reduces fines, offers more flexible payment terms on natural gas supply contracts as incentives to manufacturers: EGAS wants to play nice with manufacturers. The state gas monopoly has approved amendments to its natural gas supply contracts for factories that mean to encourage more manufacturers to grow and set up shop, Trade and Industry Minister Tarek Kabil said yesterday, Al Ahram reports. In addition to eliminating a 2.5% surcharge on manufacturers’ overdue bills to EGAS, the amendments would reduce the fines manufacturers across multiple consumption brackets (above and below the 20,000 cbm/d marker) have to pay for using more than their annual contracted amount of natural gas. The amendments — which Kabil says aims primarily to incentivize SMEs to set up shop — also offer more flexible payment terms, setting a lower insurance fee that requires producers to pay a deposit covering 30 rather than 60 days of consumption; and allowing businesses to pay for installation and connection fees in instalments over a 24-month period, up from 18 months before, provided they make a downpayment of 25% of the total.
The changes will affect new and old new contracts. Lower fines could help appease angry manufacturers, who have been railing about rising natural gas prices after the EGP float, claiming natural gas supply has been interrupted at a number of factories that fell behind on bill payments due to mounting financial pressure. Manufacturers have been pushing for the government to lower gas prices, but officials strongly hinted last year that a move in that direction is unlikely.