Tougher Times Ahead

[HEPZIBAH]

Egypt faces energy strain as Israel and Iran escalate conflict
Egyptians are preparing for tougher times as the government begins limiting gas supplies to some industrial activities.
CAIRO

The military escalation between Israel and Iran has disrupted Egypt’s economic plans, forcing the government to brace for difficult scenarios concerning the country’s energy future and the potential impact on strategic commodity reserves. This comes amid a deepening economic crisis and growing public discontent with harsh living conditions.

Egyptians are preparing for tougher times as the government begins limiting gas supplies to some industrial activities, raising the prospect of returning to load-shedding and extended power cuts throughout the day, despite official reassurances that such measures remain off the table.

Prime Minister Mostafa Madbouly said the government is closely monitoring developments in the Middle East and has taken concrete steps to bolster strategic commodity reserves, stabilise markets and secure fuel for power stations amid heightened geopolitical uncertainty.

Citizens are following the Israel-Iran standoff with concern, fearing new austerity measures. The government has often cited external crises to justify tough domestic decisions, including price hikes and erratic public services such as electricity.

The tone from officials overseeing key sectors, wheat, rice, sugar, electricity, gas, petrol, suggests the government is preparing the public for a wartime economy and considering emergency measures in vital sectors, especially energy.

Political analysts say the government’s biggest challenge is its waning credibility. Many doubt that ministries involved in the crisis have realistic contingency plans to mitigate the impact on both the state and citizens, especially given the scarcity of alternatives and lack of advance preparation.

Despite promoting development and investment, the government has struggled to convince the public it is ready for worsening regional instability, as economic improvements have yet to reach everyday Egyptians.

Authorities had promoted oil field discoveries to signal a reduced reliance on Israeli gas and a growing ability to meet local energy needs. But that narrative was undercut by disruptions in economic activity and mounting energy uncertainty after Israeli gas fields halted production.

Egypt currently faces a daily gas deficit of 3.5 billion cubic metres, with one billion previously supplied by Israel’s offshore Leviathan field, one of the Eastern Mediterranean’s largest, serving both Israeli consumption and exports to Egypt.

This has fuelled fears of a return to summer power rationing, despite Cabinet spokesman Mohamed el-Homsani denying any such plans are under consideration.

The government previously promised that last summer’s power outages, lasting hours across much of the country, would not be repeated this year, regardless of the cost of importing fuel.

But Egypt can no longer rely on Israeli gas, at least not until tensions ease between Tel Aviv and Tehran. Concerns are growing that regional conflict could make it even harder to secure fuel, energy, and strategic commodities, most of which Egypt imports.

Madbouly attempted to reassure citizens by announcing plans to operate three regasification vessels starting in July, with a combined capacity of 2,250 million cubic feet per day, up from 1,000 last year. He also said Egypt has secured gas shipments and holds reasonable reserves of mazut.

Supply Minister Sherif Farouk said Egypt’s strategic reserves would last over six months for wheat, twelve months for sugar, four months for vegetable oil, and twelve months for meat and poultry. He added that the government is working to expand these reserves beyond safe thresholds to ensure stable food supplies through new procurement deals.

Cairo has taken steps to secure wheat reserves, the most critical staple, hoping to avoid the difficulties faced during the early stages of the Russia-Ukraine war, which disrupted imports for months. A key advantage this time is that the escalation coincides with the end of Egypt’s wheat harvest.

The government is also buoyed by a rise in foreign reserves, which reached $48.525 billion at the end of May, enough to cover essential imports for eight months, far exceeding the global average of three months.

Observers say the scope of the government’s actions reflects early preparations. Egypt had warned about regional escalation and expected these developments, suggesting it was not caught off guard and does have fallback plans.

They told The Arab Weekly that Egyptians prioritise security and stability, something the government does not exploit politically but treats as a basic reality. The public’s commitment to stability gives the government space to respond to the crisis with practical, alternative measures, and the announced plans show Cairo is preparing for all scenarios.

Still, while the government appears serious about tackling the crisis, its actions on the ground indicate it is conditioning the public for an exceptional period that will demand greater patience and carry significant costs due to Egypt’s geographic exposure to regional instability. Officials are aware the country cannot navigate the crisis alone.

Local media have reported that the ministry of electricity is preparing to revise electricity tariffs in July. The government has avoided raising bills for some time out of sensitivity to household budgets, but the rising cost of imported gas may force a change.

Egyptian governments have routinely turned to the public for financial support during crises blamed on external factors, arguing that citizens must help bear the cost to preserve national stability. This has made official rhetoric increasingly suspect and raised questions about the legitimacy of repeated reliance on international events to justify domestic hardship.

Many Egyptians now fear the government could lose control of the market, triggering soaring prices, especially if key agencies become distracted by security and political files. This could worsen living conditions, leaving citizens at the mercy of traders who routinely use regional turmoil to justify price spikes.


Written By Ahmad Hafez
Ahmad Hafez is an Egyptian writer.

Copied from The Arab Weekly printed/on line Sunday 15/06/2025

[crewmeal]

A very interesting article. I wonder how this will affect tourism especially in the Luxor area. I have a feeling numbers will drop if this war continues at its present rate.

[HEPZIBAH]

A very interesting article. I wonder how this will affect tourism especially in the Luxor area. I have a feeling numbers will drop if this war continues at its present rate.

Yes, I think numbers will drop too. In general many people are very distrusting of travelling to North Africa/Egypt and the Middle East, so it is reasonable to assume that bookings for the autumn/winter season are going to drop. Many are also more fearful of flying at the moment too, with so many accidents and no fly zones.