Natural gas for non-energy intensive industries to increase by 15 percent

The Energy Pricing Committee approved two days ago the increase in the prices of energy for non-energy intensive industries by 15 percent. The new price of natural gas will be US$2 per million thermal units.

The price of natural gas for energy-intensive industries including iron, cement, aluminum, copper and fertilizer industries—which consume 60 percent of the energy allocated to the industrial sector will remain at US$3 per million thermal units. The price of electricity will increase by 50 percent at peak consumption hours specified by the Ministry of Electricity.  The aim is to rationalize consumption and reduce the pressure on power stations.

Minister of Trade and Industry Rachid Mohamed Rachid added that the new pricing system takes into consideration the prices of energy in neighboring countries and the real cost of production of energy. It also takes into account the government’s decision to gradually reduce the energy subsidy.

Rachid said in a statement yesterday that the committee—formed of members from the Electricity, Petroleum, Investment and Finance Ministries—will submit a report including those changes to Prime Minister Ahmed Nazif to be approved finally and implemented in the fiscal year 2010/2011.

Amr Assal, head of the Industrial Development Authority and of the Energy Pricing Committee, said the new rules include a series of changes.

‪Prices for non-energy intensive industries—which consume 30 percent of the energy allocated to the industrial sector—will be increased by 15 percent. The new price will be US$2 per million thermal units instead of US$2.18.‬

‪ Glass, ceramic and porcelain industries will be supplied energy at US$2.3 instead of US$3. ‬

‪The committee has also decided to list chemical, plastic, paper and decorated glass industries as non-energy intensive industries since they only consume 3 percent of energy.  ‬

‪Assal said there is no time limit for the implementation of the new prices set by the committee and that annual price increments have not been decided on. He added that any new changes will be dictated by market mechanisms and the pricing committee which will convene every three months.‬

‪Waleed Helal, head of the Export Council for Chemical Industries, welcomed the new pricing system and the listing of the chemical industries as non-energy intensive. He added that the committee has responded to the demands of the industrial sector which are mainly to safeguard the competitiveness of the Egyptian industry.‬

‪Translated from the Arabic Edition.‬


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