Govt hikes rates for gas supplied to homes, saying decision was taken weeks ago

Rates have gone up for gas supplied to homes via the national grid, although government statements and documentation do not clarify when.

Press reports circulated on Sunday and Monday in Egypt claiming that an increase in the price of natural gas supplied via the grid to homes and businesses would be effective starting in November. 

But the Petroleum Ministry denied the “recent reports on news websites” in an online statement on Monday, while the prime minister’s office also dismissed the reports as “rumors.” Both official bodies said the reported prices were actually approved and implemented as part of a package of price increases in September.

An informed source in the energy sector told Mada Masr on condition of anonymity that the decision to raise prices was made earlier, although they did not disclose the date, and was set to take effect at the beginning of October.

Mada Masr reviewed the Official Gazette issues released from September until the first Sunday in November, however, and found no published decision approving a gas price hike. Statements from both the ministry and the prime minister’s office also provided no decree number or effective date for any such adjustment.

The privately owned Al-Shorouk newspaper and the Cairo24 outlet were among those who published the news, which some sites attributed to sources. Later, all outlets edited or removed the stories after the Petroleum Ministry’s statement.

Despite the official statements, the Gas Regulatory Authority’s website still lists the old rates set by decree 5003 /2023, issued last December, which are still the official rates preceding the newly reported figures.

Under the latest price adjustments, regardless of their approval date, rates for the lowest usage bracket rose by 15 percent, from LE2.60 to LE3 per cubic meter of gas. The next bracket saw an increase of around 20 percent, rising from LE3.35 to LE4, while the top bracket increased by 25 percent, from LE4 to LE5.

According to the government’s statement, the recent price hikes are intended to bridge the gap between consumer prices and production costs, reiterating the rationale it provided for recent increases in energy prices over the past few months.

This latest hike, disclosed to the public on Monday but which the government says was issued two months ago, mirrors a similar announcement in late August when electricity rates were said to have taken effect from the start of that month.

Lawyer Khaled Ali told Mada Masr that in such cases, the government typically releases a Gazette supplement to an older issue, backdating it to reflect the date it wants the decree to bear. Ali added that this practice has become a recurring obstacle in attempts to file cases against the government’s implementation of decrees that are not published in the Gazette, as the government then submits the supplement.

In the past two months, the government has raised prices for electricity, household and commercial gas canisters, and later, fuel products including diesel, mazut, and natural gas for vehicles. 

During this period, inflation surged again after a phase of deceleration, driven by increases in the housing, water, gas, electricity, and fuel category. In September, the monthly inflation rate reached its highest level since May 2023.

Following the package of hikes, President Abdel Fattah al-Sisi instructed the government in late October to reassess if its loan agreement with the International Monetary Fund would strain public sentiment.

The IMF has demanded that the government work to cut its spending on in-kind subsidies, such as spending to fix the price of fuel for the public. Successive price increases, however, have raised the cost of living across the country, at the same time as the decreasing value of the pound has diminished spending power.