The government decided to reduce gas supplies to the industrial sector to address the power crisis, following a meeting between companies and President Abdel Fattah Al-Sisi last Wednesday.
According to an August report issued by the Ministry of Petroleum, the gas supply to factories is being cut daily by 725m cubic feet, which represents 65% of the total consumption of the cement, fertiliser, iron, and methanex industries.
The total consumption of these industries is estimated at 1.25bn cubic feet. Gas is being cut to the industrial sector in order to provide gas to power plants, which also lack gas as a result of a decrease in gas production, according to the report.
The government has stopped pumping gas to factories of EBIC, Alexandria Fertilizers, and Egyptian Fertilizers since 6 August, to provide for the needs of power stations.
The Ministry of Petroleum lowered the amount of gas pumped to cement factories by about 331m cubic feet of gas per day. The total amount needed for cement factories is 430m cubic feet, according to the report.
The government also stopped pumping gas to Beni Suef, Sinai, South Valley, Amreyah, Al-Arish, and Suez cement companies, compensating them with diesel fuel equivalents.
Gas supplied to power plants increased to 3.07bn cubic feet per day instead of 2.9bn cubic feet in the past few months, in addition to about 23,500 tonnes of fuel oil and 3000 tonnes of diesel, the report stated.
Power plants are in need of additional 247m cubic feet of gas equivalents per day, as they currently pump out 4.17bn cubic feet daily compared to a requirement estimated at 4.41 cubic feet.
Egypt gas production rates fell to about 4.65bn cubic feet per day, compared to 4.75bn cubic feet last month, as a result of natural declines of wells, the report said.
The report stressed that Egypt is facing a severe shortage in the production of natural gas in light of slowing development and research operations by foreign partners, which has led to a lack of connecting new wells onto the production grid to offset the decline.
Several officials have stated that foreign partners have withheld necessary investments to boost production because of the delay in repaying the debts, estimated at $1.5bn, the Egyptian government owes them.