Rise in gas prices for Egyptian cement manufacturers

According to local news reports, the Egyptian government’s decision to cut natural gas subsidies for cement manufacturers has increased the price of gas from US$6 to US$8 per million British Thermal Units (BTUs). The cost of fuel oil has also risen from EGP1500/t to EGP2250/t.

A cement company official told local press that cement prices are forecast to increase due to higher manufacturing costs; power represents approximately 60% of the overall cost for cement production. The impact of the price hike on consumers remains to be seen, as prices are also affected by supply and demand.

The official further noted the significance of gas shortages throughout the country, which have resulted in a considerable reduction in manufacturers’ production capacities. As a result of the shortages, a number of companies are looking to use coal as an alternative power source. Egypt's newly appointed Environment Minister, Khaled Fahmy, asserted at a recent press conference that, given the current situation, the country has no choice but to use coal in energy-intensive industries. Coal will only be used in the manufacturing of cement as it is burned at 1300 °C, which, according to Fahmy, is a high enough temperature to prevent harmful emissions. There is no legislation in Egyptian law banning coal imports; however, importers must meet certain conditions as stipulated by the previous cabinet before they will be issued a mandatory permit.

Edited from various sources by Rosalie Starling

Read the article online at: https://www.worldcement.com/africa-middle-east/08072014/rise_in_gas_prices_for_egyptian_cement_manufacturers_47/