The Automatic Fuel Pricing Committee raised prices for all fuel categories by 15 to 22 percent at 3 a.m. on Tuesday. This sudden mid-week decision breaks the normal quarterly review pattern, with increases typically issued at the week's end. It followed a meeting where Prime Minister Mostafa Madbuly discussed options with ministers, including Petroleum Minister Karim Badawy, to address a potential energy crisis if the US-Israeli war on Iran persists.
The Petroleum Ministry announced the hike one minute before it took effect, citing 'exceptional circumstances' in global markets. Egypt's hedging agreements cover only about 60 percent of crude import volumes. The increases include: all gasoline and diesel types by LE3 per liter, natural gas vehicle fuel by LE3 per cubic meter, 12.5 kg cooking gas canisters by LE50, and 25 kg by LE100.
The US-Israeli war on Iran began ten days ago, pushing Brent crude over $110 per barrel with a 20 percent jump in Monday's early trading, a total 64 percent rise since the start. Iran targeted energy facilities in Israel and Gulf countries, causing partial or full shutdowns. It also hit oil and gas tankers in the Strait of Hormuz, reducing Gulf output.
QatarEnergy declared force majeure, followed by Kuwait Petroleum Corporation cutting production, Iraq reducing capacity by 1.5 million barrels per day, Abu Dhabi National Oil Company stating it will 'control output,' and Saudi Aramco reducing at two fields. Qatari Energy Minister Saad al-Kaabi warned that Gulf countries would halt production 'in days,' pushing prices to $150 per barrel and impacting global GDP growth. US President Donald Trump called the effects 'short term' and a 'small price to pay for safety and peace.'
As a net energy importer, Egypt faces challenges with natural gas, which accounts for 49 percent of its total supply and 70 percent of electricity generation. Israel shut Leviathan field, its main pipeline supplier covering 15-20 percent of annual demand. QatarEnergy closed Ras Laffan facilities after strikes, despite Egypt's deals for 80 US cargoes and 24 from Qatar.
The government turned to the spot market for an additional shipment arriving at Damietta on Monday. There is no immediate gas shortage for industry, but reliance on costly spot purchases raises concerns, especially with the Gulf in crisis. Electricity price hikes are scheduled for July, and industrial gas prices may rise by $4 per million British thermal units. Power stations will maximize mazut use at 35,000 tons per day, covering 24 percent of capacity. The government announced consumption rationalization measures, including reviewing fuel use across sectors.
