Egypt has started operationalising an emergency energy plan, one that includes tight-fisted measures aimed at matching growing national needs with available fuel supplies.
The new plan comes in the wake of Israel’s closure of its largest Mediterranean gas field following its war on Iran, highlighting the toll the conflict is having on Egypt, one of several regional importers of Israeli gas.
The plan, unveiled by the Ministry of Petroleum and Mineral Resources on 13 June, includes suspending gas deliveries to several industrial activities.
It also includes more reliance on low-quality heavy fuels like diesel and mazut for the operation of electricity plants across the nation.
The ministry said in a statement that increasing reliance on these fuels for the operation of electricity plants aims to boost the national electricity grid.
The emergency energy plan is being put into use at a difficult time for the populous, energy-hungry Arab country.
The summer season, which has just started, is a time of high energy consumption in Egypt. It also comes as Egypt suffers a marked drop in local energy production and has been scrambling for alternative energy sources.
The measures included in the emergency plan aim to avoid resorting to load shedding, with the aim of bridging the gap between energy production and consumption.
Rolling blackouts were the Egyptian government’s way to narrow this gap in recent years, but as a policy, this proved to be highly unpopular, especially during the summer, and threatened to produce a political backlash.
Even before Israel’s closure of its Mediterranean gas field, Egypt was searching for alternatives to Israeli gas amid fears in Cairo that Tel Aviv was politicising its gas exports to the Arab country, with both sides sparring politically and diplomatically over a wide range of regional issues, including the ongoing Israeli war in Gaza.
The Egyptian government has discussed the import of gas from Qatar, which has yet to materialise but will likely take place in the coming months.
Far-reaching impact of Israel’s war
The closure of Eastern Mediterranean gas fields due to Israel’s war has brought Egypt’s gas supply down by 800 million cubic feet every day.
While this is a little more than 1% of the Arab country’s daily consumption of 6.1 billion cubic feet, it is a significant cut, especially at this time of the year.
To cope with needs and address the suspension of Israeli gas, Egypt is also trying to put three floating storage and regasification units, now off the Egyptian coast, online.
One of the units has already started operating, according to the Ministry of Petroleum, which noted that the other two units would be put online soon.
This comes amid reports citing technical problems impacting the operation of the remaining two units, including the absence of platforms required for anchoring them.
The impact on Egypt’s energy supply is, meanwhile, only one aspect of the toll Israel’s war is having on the Arab country, amid fears of far-reaching economic effects that could deepen the country’s financial woes.
“The economic ripple effects of the war are expected to be far-reaching, especially for regional states,” Alia al-Mahdi, the former dean of the College of Economics and Political Science at Cairo University, told The New Arab.
“These effects will make life hard for people on the streets, particularly if the war drags on for long,” she added.
Shares on the Egyptian stock exchange are already taking a hit from the war, while the Egyptian pound is also weakening significantly, losing value against foreign currencies.
A weaker pound translates into more financial burdens for ordinary Egyptians who are still trying to adapt to the effects of previous pound depreciations, which ate up over 50% of the value of the Egyptian national currency.
A weaker currency also means that the Egyptian government will pay more for the import of essential goods, including fuel, especially with oil prices surging dramatically in international markets.
Israel’s war comes at a time when Egypt was trying to initiate a new phase in ties with Iran after decades of tensions. [Getty]
Egypt and Iran’s rapprochement
Egypt’s economic woes are expected to worsen if the current conflict between Iran and Israel morphs into a full-scale regional war where Iranian proxies, including the Houthi militia in Yemen, get more intensely involved.
Houthi attacks in the Red Sea have so far cost Egypt billions of dollars in Suez Canal revenue losses, forcing container ships and commercial vessels to reroute around the Cape of Good Hope.
The war also comes at a time when Egypt and Iran were trying to initiate a new phase in their relations, following decades of tensions against the background of ideological, political, and geostrategic conflicts between the two countries.
The Islamic Republic opposed the 1979 Egyptian-Israeli peace treaty and applauded the assassination of Anwar Sadat, the Egyptian leader who signed this treaty in 1981.
Iran also named a street in the northern part of its capital after Sadat’s assassin, provoking Egypt’s ire, and standing as a reminder of tensions between the two countries.
Only a few days ago, municipal authorities in Tehran changed the name of the street, in what was viewed as a gesture of goodwill to Egypt, which in the last two years has taken a series of measures to break the ice with the Islamic Republic.
Earlier this month, Iranian Foreign Minister Abbas Araghchi, in Cairo for the second time since October last year, said conditions were never riper for an improvement of relations with Egypt.
The visit of the Iranian foreign minister to the Egyptian capital came as Egypt strived to play a role in keeping the lid on regional tensions by trying to end the deadlock between Iran and the International Atomic Energy Agency (IAEA).
It did this by organising a meeting between Araghchi and IAEA Chief Rafael Grossi.
Araghchi reportedly reciprocated by handing over intelligence documents his country acquired about an Israeli plan to invade Sinai, the Egyptian territory that shares borders with Israel and Gaza, according to a Lebanese expert.
Despite the lack of confirmation from either side of the handover of such documents, it might explain Egypt’s latest military activity, which has so far included raising the alert level of its troops and conducting drills of its air defence systems.
Egypt’s mediation efforts between Iran and the IAEA came, meanwhile, as Egypt tried to prevent the row over Iran’s nuclear programme from developing into a regional war, political analysts in Cairo said.
“The current war is fraught with risks on all sides, threatening to send its devastating ramifications to all states, including Egypt,” Egyptian political analyst Samir Ghattas told TNA.
“This was why Egypt worked hard to prevent this war from happening, despite its current hardships.”
Amr Emam is a Cairo-based journalist. He has contributed to the New York Times, San Francisco Chronicle, and Al Majalla.