Egypt’s monthly gas import bill has risen to about $1.65 billion following disruptions to energy supply linked to the ongoing conflict involving Iran, Israel and the United States, according to a report by Energetica India.
The report said the country’s gas import costs have tripled as the conflict continues to affect global fuel prices and supply routes, placing pressure on Egypt’s energy spending and broader economy.
The Prime Minister of Egypt, Mostafa Madbouly said the government is prepared to manage the rise in energy costs despite increasing financial pressure caused by higher import bills.
Madbouly added that diesel prices have increased from $665 per tonne to $1,604 per tonne since the outbreak of the conflict. He also noted that butane, which is widely used for cooking in many Egyptian homes, has risen by 34 per cent to $730 per tonne.
He said the government expects the situation to continue for several months and may last until the end of the year, depending on how the conflict and global energy market conditions develop.
Egypt’s declining domestic gas production
A report by the Institute of International Finance (IIF) linked Egypt’s growing reliance on imported gas to declining domestic production. According to the report, ageing gas fields and limited investment in new production have reduced local output in recent years.
At the same time, domestic demand for energy has continued to increase, leading to a situation where Egypt has moved from being a gas exporter to a net hydrocarbon importer. This has made the country more exposed to global fuel price changes and supply disruptions.
Egypt mainly imports gas from Israel and the United States. However, Israel suspended gas exports at the beginning of the conflict, affecting between seven and 10 per cent of Egypt’s total energy consumption.
Although exports later resumed partially on March 9, supplies remain limited because Israel must first meet its domestic energy needs before exporting.
Capital outflows raise concerns
Meanwhile, IIF also warned that the country is facing growing economic pressure, noting that Egypt is experiencing its largest capital outflows since 2022.
According to the report, Egypt recorded net capital outflows of about EGP 210 billion, equivalent to around $4 billion, within the first two weeks of March alone.
Analysts say this reflects investor concerns about global market uncertainty and rising energy costs, which are affecting countries that rely heavily on fuel imports.
Rising fuel import costs are expected to increase government spending and put pressure on foreign exchange reserves, while also affecting electricity generation and industrial production costs in the country.
The report noted that the impact of the Middle East conflict is now affecting energy-importing countries such as Egypt, where higher fuel costs and supply disruptions are increasing pressure on government finances and the wider economy.
