Govt approves private-sector energy imports

The government has given preliminary approval to allow private-sector companies to import energy for new cement factories, according to a senior official. The state-run Industrial Development Agency (IDA) is currently preparing to offer new licenses for cement production by mid-year.

The official–who preferred to remain anonymous–said that Petroleum Minister Sameh Fahmy held a meeting on Tuesday with Industry and Trade Minister Rachid Mohamed Rahcid. Attendees discussed proposed private-sector energy import schemes, for which both ministers expressed approval, the official said, noting that newly-licensed factories would require more energy in the coming period than the government had predicted.

Cabinet spokesman Magdy Rady announced on Tuesday that local consumption of natural gas was currently rising by 9 percent annually. Total consumption had also soared from 2.5 billion square meters in 1981/82 to 14.5 billion in 2008/09, Rady noted.

Petroleum Ministry estimates for 2009/2010 put overall gas consumption at 45 billion square meters, divided as follows: 24.5 billion square meters for the electricity sector (54 percent); 14 billion for industrial activities (31 percent); oil derivatives production (12 percent); home usage (2 percent); and automobile fuel (1 percent).

The ministers’ approval of private-sector energy imports comes in line with a government policy aimed at restructuring the energy sector and allowing it a larger role in the production and marketing of petroleum products. According to the official, the IDA will not include energy as part of its new cement licenses and winners of new factory bids will be free to secure their energy needs by either buying it from local providers or importing it.

Petroleum Ministry spokesman Hamdy Abdel Aziz told Al-Masry Al-Youm that the government-run Supreme Council for Energy represented the only state body with the authority to grant the private sector permission to import energy. He declined to comment, however, on the ministers’ decision.

Translated from the Arabic Edition.

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