Longer power cuts as gas imports drop to zero, says Cabinet spokesperson

Daily nationwide power outages across Egypt have begun to last longer, with the government cutting the electrical current off from homes across the country for an hour and a half or more each day.

The power outages began in July, with Prime Minister Mostafa Madbuly saying that normal coverage would resume by mid-September at the latest. But the cuts continued into the first weeks of October and lengthened over recent days.

Behind the cuts are a reduced domestic supply of natural gas — the main fuel used at power plants nationwide — paired with a foreign currency shortage distressing the public deficit. The government also says that increased temperatures have boosted domestic consumption.

Longer power cuts began on Saturday, Cabinet Spokesperson Sameh al-Kheshen said Sunday. He pointed to an increase in consumption as well as “a decrease in the quantities of gas supplied from outside Egypt, from 800 million cubic feet of gas per day to zero.”

Though Kheshen, in his Sunday statement, did not point to the primary source of Egypt’s gas imports, Egypt was receiving around 800 million cubic feet of gas per day from Israel, according to S&P Global Ratings.

Natural gas produced domestically has dropped in comparison to domestic demand over recent years. Quantities of natural gas imported to Egypt from Israel under a 2018 deal have allowed Cairo to maintain a modest surplus for export.

But when Israel started bombing the Gaza Strip following the unprecedented Hamas operation of October 7, Tel Aviv stopped production at its Tamar gas field, one of the sites producing natural gas volumes piped to Egypt. Shortly afterward, S&P noted that the Tamar shutdown had “already reduced Egypt's gas imports to 650 million cubic feet per day (cf/d) from 800 million cf/d, reducing Egypt's ability to meet domestic demand and export liquefied natural gas.”

Chevron, which operates Leviathan, the largest Israeli gas field, also rerouted its supplies being exported to Egypt in early October, saying that instead of piping them directly to Egypt via the EMG pipeline, it would instead send them via the Arab Gas Pipeline that goes through Jordan. Anonymous energy industry sources cited in Reuters at the time said that “the amount of gas exported from Israel's giant Leviathan field to Egypt has been slightly reduced as supplies to the domestic market are prioritized.”

Natural gas is the main source of fuel for electricity production in Egypt, supplying between 75 and 96 percent of the country’s electricity in 2019. Fuel oil (mazut) is also used at power plants.

More mazut could have been used to supply the deficit in natural gas resources and avoid nationwide power cuts, said a member of the House of Representatives Energy Committee while speaking to Mada Masr on condition of anonymity in July. But, they continued, “there was not enough mazut available, which is probably due to the lack of foreign currency.”

The national trade deficit has been strained since 2022, when investors pulled billions out of emerging markets. Though Egypt has undertaken major economic readjustments, allowing the value of the pound to depreciate over 50 percent against the dollar in the span of a year and launching a privatization scheme as recommended in the terms of a $3 billion IMF loan program, its balance of payments remains precarious, with multiple ratings agencies downgrading the national outlook over the summer. In its most recent downgrade, S&P Global cited the energy deficit as among its reasons. 

President Abdel Fattah al-Sisi also said that the 1-hour-per-day power outages saved the state around US$300 million a month in operational costs. Though Petroleum Minister Tarek al-Molla could put an end to the cuts in theory, said the president, speaking at a televised press conference in October, doing so would reduce the budget available to purchase petroleum derivatives.

The government has also indicated that higher temperatures this year in comparison to last year have boosted domestic consumption and strained fuel supplies. Kheshen said on Sunday that the phenomenon had increased domestic energy consumption, placing high demand on the national grid. “In order to ensure that the electricity network continues to operate safely, loads have been reduced until the temperature returns to normal levels,” he said.

When the cuts were first announced as part of a load reduction plan this summer, the government likewise said that they were a way to manage higher-than-average demand on the national grid amid an unprecedented heatwave.