The Gas Regulatory Authority’s (GASREG) decision to reduce the usage fees for the national gas grid aims to stimulate more investments from the private sector in the domestic gas market, a source in the GASREG told Daily News Egypt on Saturday.
He explained that the step also seeks to encourage local companies to buy gas from foreign partners and sell it to industrial consumers locally at prices they both agree on.
Media reports last Sunday said that Egypt has lowered the usage fees for its national gas grid by 24% to $0.29 per one million British thermal units (mmbtu). Egypt had first set the usage fees at $0.38 per mmbtu in August 2018 for a year.
The source revealed that this decision was made last March, and the GASREG will review these fees annually.
He pointed out that reducing gas grid usage fees is within the state’s procedures to liberalise the energy market, and allowing the private sector to operate and obtain licences from the gas market regulator to transfer, sell, and trade the natural gas.
He added that the only user of the national gas grid is the Egyptian Natural Gas Company (GASCO), affiliated to the Egyptian Natural Gas Holding Company (EGAS), which is responsible for obtaining gas from foreign partners and selling it to the final consumer locally or directing it for export.
The GASREG said on its website that these unified fees would be applied nationwide.
In February 2018, Egypt issued executive regulations that allow the private sector to import and sell natural gas, after the parliament has approved the law in 2017 and established the gas market regulator, which the government hopes will attract greater participation from the private sector in the rapidly growing gas market.