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Thursday, 4 June 2020

Egypt’s gov’t to waive EGP 5.3 bn-worth of natgas arrears by factories

CABINET WATCH- Cabinet greenlights Oil Ministry proposal to waive EGP 5.3 bn-worth of natural gas arrears owed by factories: Struggling state-owned and private sector factories will not have to pay EGP 5.3 bn in overdue bills for natural gas they bought from subsidiaries of the Oil Ministry on or before 31 December 2019, according to a ministry proposal approved by the Madbouly Cabinet in its weekly meeting yesterday. This will apply to late fees and penalties factories incurred for exceeding quantities specified in supply agreements with the government or failing to meet the minimum amount of natgas outlined in the agreements. The decision has not been linked directly to the covid-19 crisis and appears to be geared towards facilities that have been struggling or entirely stagnant for years.

Factories in Egypt currently pay on average USD 4.5/mmBtu of natural gas after the government slashed prices twice in the past six months, the statement notes. The first round of price cuts came last October after years of lobbying efforts by manufacturers who said high energy costs are affecting their product prices and thus sales which is causing them to work under their full production capacity.

Also approved in the cabinet meeting: France-backed agreement to improve food wholesale in Egypt: Cabinet ratified an agreement signed with France’s Semmaris and the French Development Agency (AFD) to improve the efficiency of Egypt wholesale markets in Egypt, according to a statement. Under the agreement, Semmaris — the company which administers France’s primary wholesale market Rungis — will provide recommendations to improve supply chain networks and food quality control, as well as work on studies that would help shape a national strategy for Egypt to develop fresh food wholesale markets. This so-called “technical support study” is funded by the AFD under the sponsorship of the French embassy in Cairo, the local press said in March. Eliminating waste from farm to consumer has actively been on Egypt’s agenda for 20 years now and has previously been the subject of funding from agencies including USAID.

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