The Egypt Cabinet has authorised a proposal to ration electricity in order to save natural gas, which it will instead transfer to the export market to earn foreign cash.
Russia’s invasion of Ukraine in February increased global commodity prices, causing a decline in travel between the two countries, and increased borrowing costs. As a result of which Egypt has had a severe foreign currency shortage.
The proposed plan requires stores and malls to operate fewer powerful lights and to maintain air conditioning at no lower than 25 degrees Celsius.
The statement further stated that after working hours, lights must be turned off in government buildings and ministries. Street lighting shall also be downsized.
The administration announced a six-month delay in the hike in electricity costs last month. The public, which has just been subjected to many hard austerity measures over the last few years, would have been extremely disappointed with the higher pricing as well.
The government aims to cut the quantity of gas used to produce energy by 15%, according to Prime Minister Mostafa Madbouly.
PM Mostafa Madbouly claimed that domestic power plants paid a fraction of what natural gas would sell for on international markets.
As the conflict in Ukraine intensifies, Europe has been looking for alternate gas suppliers to reduce its dependency on Russian gas.
Egypt’s natural gas supplies increased quickly in late 2018, and the discovery of the largest field in the Mediterranean helped the country transition from being a net importer to an exporter.
According to Refinitiv data, Egypt exported 9.45 million cubic metres of liquid natural gas in the first seven months of 2022, up 44% over the same period last year.