The government plans to increase prices of natural gas for non-energy intensive industries to $2.25/mBTU in January 2011, after deciding to raise the price from $1.7/mBTU to $2.0/mBTU effective July 2010, reported Al-Shorouk, citing an anonymous source at the Ministry of Finance.
The increase in the price of gas for these industries was scheduled for implementation over three phases, but will now be done over five steps, including one in January 2011, another in July 2011 when the price will be raised to $2.45/mBTU, and in January 2012, when the price will be raised to $2.65/mBTU, provided that conditions in these industries improve and exports increase, said the source.
According to Beltone Financial’s daily market report, Al-Shorouk cited an unnamed source as saying that this schedule has not been finalized yet by the different parties involved in the decision-making process.
The source stated that while the government realizes that the $3/mBTU charged for energy-intensive industries is now below cost level, it cannot raise the price at this point for fear of its negative impact and the extensive pressure the government is under.
In related news, Al-Masry Al-Youm newspaper reported that the peak hours for electricity consumption, according to sources at the Ministry of Electricity, have been identified as 19:30 to 23:00 in the summer and 17:00 to 21:00 in the winter.
The price of electricity will increase by 50 percent in these peak periods for energy-intensive industries according to the government’s recent decision, effective July 2010, reported Beltone.
“Regarding energy-intensive industries, we continue to believe that the cost of gas used by these industries is on the rise, in tandem with the rise in production costs of gas, from the Mediterranean especially, but expect that government will postpone increasing the price of gas for these industries until at least after the presidential elections and a more solid recovery in the economy,” Beltone said.
