Remarks by Egypt’s Ministry of Petroleum about growing natural gas reserves are raising doubts about the accuracy of official promises that the country is approaching self-sufficiency. This skepticism was voiced by Member of Parliament Mohamed Fouad, who said the ministry “is not telling the truth,” noting that it had previously set 2023 as the target date for achieving this goal, before postponing it to 2025, and now speaking of 2030.
This debate coincided with the ministry’s announcement of a new discovery by the Italian company Eni, which it said holds reserves estimated at around two trillion cubic feet of natural gas and 130 million barrels of condensates. The ministry emphasized that the discovery would support local production and reduce the import bill.
However, these estimates come as Egypt faces a prolonged energy crisis that has become more apparent amid regional turmoil—from the war in Gaza and the accompanying halt in gas supplies from Israel and daily electricity outages to the widening scope of military confrontation in the region, rising global energy prices, and declining supply.
The rapid surge in Egypt’s energy bill during the first months of 2026 reveals the scale of pressure on public finances but also shows that the problem does not begin with oil and gas as much as it begins with a budget constrained by debt.
Energy import costs rose from $1.2 billion in January to $1.5 billion in February, and then to $2.5 billion in March, according to official figures—an increase that Prime Minister Mostafa Madbouly acknowledged as placing pressure on the budget. This comes as the 2025–2026 budget was built on an oil price assumption of $75 per barrel, while some futures contracts rose to $112.
Yet the widening gap between budget estimates and actual prices does not alone explain the scale of the crisis. When around 80 percent of public spending goes to debt servicing, the government’s ability to absorb any external shock becomes extremely limited, and even the sharp rise in the energy bill becomes part of a deeper crisis related to the very structure of public finances.
In this context, MP Mohamed Fouad told Alhurra that “the economy is in a constant state of needing external support, regardless of periods where indicators may show improvement,” arguing that this dependence makes Egypt’s economy more vulnerable to external shocks.
Fouad’s remarks, as an economist and parliamentarian, point to the fragility of the Egyptian economy in the face of regional shocks—an idea also summarized by Prime Minister Madbouly in a previous press conference when he said Egypt is “affected by the consequences of the war in all aspects.”
This impact has not been limited to the energy bill, but has quickly extended to the currency market, where the dollar has risen by more than 12 percent against the pound since the start of the war in March, reaching 54.86 pounds. This increase has revived concerns among investors and traders about the possibility that the government may once again tighten restrictions on dollar trading, amid foreign currency shortages and pressures imposed by regional developments—conditions that often revive the black market.
In response to rising energy costs, the government has sought to pass part of the burden onto the domestic market by raising fuel prices significantly. The price of 92-octane gasoline increased by three pounds, from 19.25 pounds to 22.25 pounds per liter.
Despite government talk of new discoveries and a projected increase in production, available indicators do not suggest that Egypt is close to reducing its dependence on gas imports or containing the rising energy bill.
Medhat Youssef, former vice chairman of the Petroleum Authority, said achieving self-sufficiency requires raising daily production to about 7.3 billion cubic feet, meaning additional discoveries equivalent to 3.5 billion cubic feet will be needed by 2030. Accordingly, current announced discoveries do not appear sufficient to close the gap, especially since gas constitutes the backbone of electricity generation in Egypt, accounting for 81 percent of total generation sources by the end of 2024, according to Energy Institute data.
This assessment reinforces criticism from MP Mohamed Fouad, who told Alhurra that the Ministry of Petroleum “has been marketing self-sufficiency for years,” even as gas production in Egypt declined in 2026 to levels nearing its lowest in two decades. In his view, the government still lacks a clear path to address the crisis, relying instead on solutions that delay an explosion rather than address its root causes.
In light of this shortfall, the government has turned to direct austerity measures to rationalize consumption, imposing early closures on commercial activities and shopping malls at 9 p.m., before partially rolling this back to 11 p.m. following a ceasefire between Iran, the United States, and Israel, and under societal pressure from sectors that depend on nighttime activity. This was accompanied by an official media campaign to promote energy conservation, involving Finance Minister Ahmed Kouchouk and several artists.
Increased Production Claims Versus Early Closure Decisions
Despite government statements about new discoveries and expected production increases, available indicators do not suggest that Egypt is rapidly approaching a reduction in gas import dependence or control of its rising energy bill.
Medhat Youssef, former vice chairman of the Petroleum Authority, said achieving self-sufficiency requires raising daily production to about 7.3 billion cubic feet, implying the need for additional discoveries equivalent to 3.5 billion cubic feet by 2030. Thus, announced discoveries so far do not appear sufficient to bridge the gap, particularly since gas accounts for 81 percent of electricity generation in Egypt as of the end of 2024, according to Energy Institute data.
This reinforces criticism from MP Mohamed Fouad, who told Alhurra that the Ministry of Petroleum “has been marketing self-sufficiency for years,” even as gas production in Egypt fell in 2026 to levels close to its lowest in two decades. In his view, the government still lacks a clear path to address the crisis, relying instead on solutions that postpone the problem rather than solve it.
Faced with this deficit, the government adopted direct austerity measures to rationalize consumption, imposing early closures on commercial activities and malls at 9 p.m., before partially retreating to 11 p.m. after a ceasefire between Iran and Israel, and under pressure from sectors dependent on nighttime operations. This was accompanied by an official campaign promoting energy conservation, involving Finance Minister Ahmed Kouchouk and several artists.
Partners’ Rights… A Prerequisite Before Promises of Increased Production
Despite government statements about raising oil production from Gulf of Suez fields to 26.6 thousand barrels per day, compared to about 17 thousand in fiscal year 2025–2026, translating these promises into actual production depends not only on the availability of reserves but also on the state’s ability to meet its obligations to foreign partners.
According to Medhat Youssef, former vice chairman of the Petroleum Authority, foreign companies cannot increase oil or gas production simply because reserves are available unless they can inject significant financing, and unless the state simultaneously commits to settling outstanding debts and paying partners’ dues on time.
This reveals another dimension of the crisis: the issue is not only about resources, but also about financing and trust—namely, the government’s ability to provide a stable investment environment for companies expected to lead any anticipated increase in production.
Before the end of last January, the Egyptian parliament witnessed its first interpellation regarding the gas and energy crisis, submitted by the Justice Party to Petroleum Minister Karim Badawi. The inquiry questioned the reasons behind the drop in daily production from around 7 billion cubic feet to 3.9 billion cubic feet, and the rise in the import bill from $12 billion in 2024 to $21 billion in 2025.
However, the minister was not summoned for questioning, while the government continues to promote the listing of ten oil companies on the Egyptian stock exchange to attract new investments, at a time when the sector appears headed for another test with the onset of summer and rising energy demand.
The article is a translation of the original Arabic.
