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Tuesday, 24 November 2020

Manufacturers could be allowed to reschedule natural gas debts

Manufacturers could be allowed to reschedule unpaid natural gas bills over a period of up to 10 years, according to a local press report quoting Egyptian Federation of Investors Associations (EFIA) board member Sobhy Nasr. The EFIA has been lobbying officials to allow a 15-year period to reschedule the debt but the proposal was rejected by the Oil Ministry, which instead said it would consider a 10-year repayment period provided companies pay off their debts alongside new bills on a monthly basis. The ministry also said it would look into cutting prices to USD 3 / mmbtu from USD 4.5 currently at the end of this year or early 2021, and promised better energy infrastructure down the road, Nasr said. Manufacturers have been aggressively calling for a significant reduction in gas prices for the past few years.

The ministry refused to waive interest payments on the arrears and postponed discussions on cancelling fines for overconsumption to a later meeting. The government last summer approved a ministry proposal to write off EGP 5.3 bn in late fees and penalties incurred by factories.

Background: Long-term demands from factories for lower gas prices are now being more seriously considered by a newly-formed task force made up of EFIA and state-owned EGAS. The group will look at aligning local and international prices, waiving interest fees on late gas payments, and allowing debts to be paid in installments.

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