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Wednesday, 17 March 2021

How much will car owners pay to transition to natgas?

Here’s how much swapping your car for a natgas vehicle will set you back: Passenger car owners looking to swap old vehicles for new ones running on cleaner energy will have their pick of seven models eligible for state financial support, according to a list (pdf) published on the government’s natgas transition plan website. The cars include models by Hyundai, Chevrolet, Nissan, Lada, and BYD, with prices starting at EGP 146k for a Lada Granta bought straight off the lot and ranging as high as EGP 279k for a Nissan Sentra. The same models are also available for purchase with 7- and 10-year payment plans.

And here’s how you could fund it: Buyers will be eligible for subsidized loans funded by the central bank, the Trade and Industry Ministry, and MSME Development Agency, which will hand out a combined EGP 16.2 bn to vehicle owners through participating banks. Borrowers will pay a 3% rate of interest over a 7-10 year repayment period. The Finance Ministry is also providing financial incentives to people to participate in the scheme: Car owners can get up to EGP 22k off the cost of a new vehicle, taxi owners EGP 45k and microbus owners EGP 65k.

Background: The first phase of Sisi administration’s plan to convert or replace 1.8 mn cars to run on dual-fuel engines kicked off earlier this month, with car owners in seven governorates now eligible to sign up. This phase is expected to see 250k old passenger cars, microbuses, and taxis taken off the road and outfitted with new engines by the end of 2023. The entire three-stage program is expected to cost EGP 320 bn at its completion, with the government previously estimating the cost of each vehicle conversion at EGP 8k-12k.


The government will continue to subsidize butane gas cylinders over the next fiscal year, keeping their end user price at EGP 65 apiece, almost half the EGP 120 production cost, El Watan reports, citing an Oil Ministry source. The government lifted subsidies on most other petroleum products in 2019 as part of the IMF-sanctioned economic reform program, though the butane still used by mns to fire up their stovetops and fuel used for bakeries and electricity plants remains heavily subsidized. The state has for years now funded projects to bring regulated natural gas lines to homes nationwide, providing a subsidy to contractors owned by EK Holding and TAQA Arabia, among others, to connect homes to the national grid.

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