Cairo Egyptians are awaiting the implementation of the solutions announced by the government to end the power outage through an urgent plan to solve the worsening crisis throughout the country. The cost of this plan amounts to about $1.18 billion, to provide the fuel needed to stabilize the operation of the electricity networks and reduce the periods of outage.
Last Tuesday, in an urgent meeting, Egyptian Prime Minister Mostafa Madbouly promised to end the crisis by the third week of next July, after the government contracted for fuel shipments (liquefied gas worth $1 billion and diesel worth $180 million), but until the new shipments arrive. The load shedding policy will continue at a rate of two hours per day.
Regarding the government’s plan to stop power outages after the end of the summer months, Madbouly explained that during the remaining months until the end of the year, work will be done to reduce load shedding through a clear plan and arranging additional amounts, which means the power outage will return again.
Madbouly attributed the load shedding crisis to several reasons:
- The problem of managing fuel and dollar resources.
- Increased consumption due to development efforts.
- Steady population increase.
- Sudden rise in temperature.
However, he pointed to another reason related to the increase in the number of hours of power cuts over the past few days, which is a malfunction in one of the gas fields in a neighboring country that he did not name (referring to Israel) and it was out of service for 12 hours.
Growing reliance on Israeli gas
Avoiding mentioning the name of Israel raised questions about transparency and the Egyptian strategy regarding the extent of Egypt’s dependence on Israeli gas, which some specialists estimated at about 18%, and as part of the government’s strategy not to arouse public opinion, which feels extreme anger towards the electricity outage crisis on the one hand, and towards the Israeli aggression against the Gaza Strip. Gaza on the other hand.
Egypt began importing gas from Israel for the first time in early 2020, under one of the largest deals signed by the two countries to import 85 billion cubic meters of gas over 15 years for about $19.5 billion.
The Egyptian Prime Minister’s talk about pressure to secure dollar resources to buy fuel also raised questions about the tens of billions of dollars that Egypt has collected from international financing pledges and the “Ras Al-Hikma” deal three months ago.
Welcome and apprehension
The government plan was widely welcomed by the Egyptian street, but some are concerned that these promises are merely a repetition of previous promises that were not implemented, which raises questions about the plan’s effectiveness and its ability to end the crisis definitively.
Observers and followers monitored the previous government’s promises regarding ending the load shedding crisis:
- July 19, 2023: The government promised the end of load shedding due to the heat wave. This was not achieved.
- September 28, 2023: An official source announced that “the power outage crisis will end within days, with temperatures falling and fuel supplies improving.”
- December 3, 2023: Informed sources said that load shedding will be limited to one hour instead of two hours before the end of the month.
However, it seems that providing additional quantities of fuel to operate power stations 24 hours a day is not enough, as the government has imposed a plan to rationalize electrical energy consumption, starting from the beginning of next month, such as:
- Shops and malls close at 10pm.
- Pharmacies, supermarkets and restaurants close at 1:00 a.m.
- Requesting citizens to implement rationalization processes inside homes and various establishments.
Israel, the dollar and their relationship to the crisis
Economist and former member of the Economic Committee in the Egyptian Parliament, Mohamed Fouad, praised holding a press conference regarding the crisis, saying, “Disclosure is an important part of resolving the crisis, but this does not excuse the existence of mismanagement in energy planning and deficit management.”
He ruled out, in statements to Al Jazeera Net, that there would be a crisis in securing the funds necessary to purchase fuel shipments, but the matter is related to the government’s prioritization, especially with Egypt receiving inflows of tens of billions.
Fouad attributed the lack of energy to operate power plants to Egypt’s transformation from a country with sufficiency to a country with a deficit. This is due to poor planning and mismanagement of the deficit, and there has become a gap between production and consumption estimated at about one billion cubic feet per day, which is an uncertain or accurate number.
At the same time, the former parliamentarian pointed out that imports alone will not solve the power outage crisis and long-term solutions must be put in place, such as increasing research and exploration operations, bringing new wells into service, and paying dues to foreign partners.
He believed that the Prime Minister’s failure to name the name of the country that supplies Egypt with gas and disrupted one of the production fields may be related to the government’s desire not to involve the name of that country in the crisis on the one hand, and taking into account the feelings of Egyptians angry about the aggression against Gaza on the other hand.
Change in the energy situation in Egypt
There is a major shift in the energy situation in Egypt, according to Khaled Fouad, a researcher specializing in energy affairs and international relations. He said, “There is a major change in the energy situation in Egypt, which is directing its imports of Israeli gas to the local market entirely, instead of re-exporting it again.” Due to the decline in production from Zohr field, which provides 40% of Egypt’s production.”
This transformation raised, according to Fouad’s statements to Al Jazeera Net, questions about the extent of Egypt’s dependence on Israeli gas at the present time, and how much of it represents domestic consumption, and returning to the volume of Egypt’s imports of Israeli gas, which amounts to 1.1 billion cubic feet per day, and the volume of domestic consumption, which amounts to about 6.1 billion. cubic feet, it constitutes about 18% of the total consumption.
He expected that this percentage would increase based on the latest agreement to increase Israeli gas exports to Egypt to 1.5 billion cubic feet per day, which represents approximately 20% to 25% of the country’s gas needs, noting that this situation represents a threat to Egyptian energy security due to its geopolitical dimensions and the use of gas as a political tool to pressure Egypt.
The energy researcher did not rule out the possibility of cutting off Israeli gas supplies to Egypt again in the coming period, but he pointed out that Cairo’s move to import shipments of liquefied gas again stemmed from its awareness of the danger of relying on Israeli gas, but it came late, complicated and costly even if financial allocations were available due to the increased demand for it.
He called on the Egyptian government to secure various sources of natural gas to confront the crisis that has been expected for some time, to balance increasing production and maintaining the condition of productive wells, and to deal with the energy file from a geopolitical perspective, and not just from an economic perspective.
Egypt has awarded a bid to buy 17 cargoes of liquefied natural gas for delivery during the summer, at a premium of $1.6-1.9 to the standard price of the Dutch gas trading platform, according to what Reuters quoted trade sources as saying.
