Egypt imposes energy-saving measures as Iran war drives up costs

Egypt will slow fuel-intensive state projects and implement energy-saving measures amid rising energy costs linked to the war with Iran, Prime Minister Mostafa Madbouly said on March 28th, as reported by Reuters on the same day, and AP on March 30th.

Shops, restaurants, cafes and malls have been ordered to close at 9 p.m. for one month, starting on March 28th, while fuel allocations for government vehicles will be cut by 30%.

Large public projects that consume high amounts of diesel will be delayed for at least two months.

Street lighting and roadside advertising will also be reduced, and government offices in the New Administrative Capital will close by 6 p.m.

Civil servants and parts of the private sector will work remotely one day a week in April, excluding essential services and manufacturing; the measure could be extended if the conflict continues.

Madbouly said the steps aim to reduce fuel consumption and ease pressure from rising global energy prices, warning that the alternative would be further price increases.

The measures form part of a broader government effort to reduce fuel consumption, according to Egypt Oil & Gas.

Egypt has already raised fuel and public transport prices this month as the conflict disrupted oil and gas production and trade across the Middle East.

The country depends heavily on imported fuel, with around 28% of its gasoline and 45% of its diesel imported; Madbouly said the monthly oil bill had more than doubled since January to $2.5 billion.

Major tourist areas, including Hurghada, Sharm el-Sheikh, Marsa Alam, Luxor and Aswan, are exempt from the restrictions, given the sector’s importance as a source of foreign currency.

The measures come amid disruption to regional energy supply routes, including through the Strait of Hormuz, a key route for global oil and gas shipments.

Egypt consumes about $20 billion in oil products annually, including fuel used for power generation.

Madbouly said the steps are temporary and that the government is considering increasing the minimum wage and boosting spending on healthcare and education in the next fiscal year.

Finance Minister Ahmed Kouchouk said debt servicing costs are expected to rise by about 5% in the fiscal year starting in July.

Reuters, AP, Egypt Oil & Gas