A Fresh Gas Cut: Egypt's Fertiliser Makers Face New PressureA Fresh Gas Cut: Egypt'sFertiliser MakersFace New Pressure

The latest cut, announced on Sunday, 8 November, follows an earlier 20% reduction introduced at the start of the month. Misr Fertilizers Production Company, known as MOPCO, confirmed in a disclosure to the Egyptian Exchange that it had received notice of the new reduction.

The company said its operating and production processes were being managed around the quantities of gas available. The Egyptian Exchange disclosure records the company's statement.

Reuters reported that the government is restricting industrial gas use to reduce its need for expensive liquefied natural gas (LNG) imports. Egypt relies on gas for electricity generation as well as industrial production, but domestic output has struggled to keep up with demand.

The move places manufacturers under greater pressure just as the cost of securing replacement gas from overseas has risen.

Factories face a tighter supply of gas

Natural gas is not simply a fuel for fertiliser plants. It is also a key raw material in making ammonia, which is then used to produce nitrogen fertilisers such as urea. A shortage can therefore affect both the energy available to run a factory and the amount of product it can make.

MOPCO said it was adapting operations to the available supply, but did not announce a specific production reduction. The company is one of Egypt's major nitrogen fertiliser producers, with facilities in Damietta.

Abu Qir Fertilizers and Chemical Industries had earlier said it would manage production using the gas available, while putting contingency plans in place for inventory and maintenance, Reuters reported.

The pressure is not identical across every manufacturer. Egyptian newspaper Al Shorouk reported that Mohamed El Khashen, chairman of specialist fertiliser producer Evergrow, expected the 33% supply reduction to cut his group's production by about 20%, with exports also forecast to fall by a similar amount. That is a company-specific estimate, not a confirmed industry-wide decline.

The Egyptian Fertilizers Producers Association and the Petroleum Ministry had not published a consolidated estimate of how much national output could be lost by the time of publication.

A costly gas shortage

Egypt's reliance on imported gas has grown as domestic production has fallen short of demand. The government has been buying LNG cargoes to support electricity generation and other essential needs, but the cost has become harder to absorb as international prices rise.

Reuters reported that Egypt had budgeted about KSh1.31 trillion (US$10.1 billion) for LNG in the 2026/27 financial year. An analyst told the news agency that the country had already spent KSh753.5 billion (US$5.8 billion) by 6 October, putting the budget under pressure.

The shilling conversions use the Central Bank of Kenya's indicative rate of KSh129.91 to the dollar published on 6 November. The figures are approximate.

The government has also turned to fuel oil as a cheaper alternative for some power generation needs. Reuters reported that the state-run Egyptian General Petroleum Corporation bought six high-sulphur fuel oil cargoes for delivery in November and December.

For fertiliser makers, the trade-off is direct: gas reserved for electricity and other priority uses is not available to factories at the same level, while imported LNG adds pressure to public spending. Kenya has also faced pressure in domestic fuel prices, as covered in Mwenendo's report on the rise in kerosene pump prices.

Farmers have a buffer, for now

Egypt's Agriculture Minister Alaa Farouk said the gas cuts would not affect the quantities of subsidised fertiliser allocated to farmers under the state support system. In comments reported by Al Shorouk, he said agricultural cooperatives held around 400,000 tonnes of fertiliser, enough to cover their needs for more than two months.

That assurance is important, but it does not mean the wider market is insulated from the production squeeze. Subsidised allocations are only one part of the fertiliser market. Manufacturers also supply commercial buyers and export customers, and the effects of prolonged restrictions will depend on how long the cuts last and how companies manage their available stocks.

Egypt is a significant producer and exporter of nitrogen fertilisers. A sustained reduction in factory output could tighten export availability or alter delivery schedules, although the scale of any change has not yet been established.

For buyers elsewhere in Africa, the development is worth watching rather than treating as evidence of an immediate shortage. Fertiliser prices are influenced by production costs, shipping, global demand and supply from other producing countries. A disruption in one exporting country can add pressure, but it does not by itself establish that African farmers will face higher prices.

The decisions ahead

The immediate test is whether the 33% reduction remains in place and how individual producers adjust. MOPCO has said it will continue operating with the gas supplied to it. Abu Qir has previously described plans to manage inventory and reschedule maintenance, while Evergrow has warned of a possible fall in production and exports.

The Petroleum Ministry had not publicly set an end date for the latest restrictions in the reports available on Sunday. Its response will be central to whether the cuts remain a short-term measure or become a longer constraint on industrial production.

Egypt is trying to protect electricity supply and contain a rising import bill. But keeping gas away from factories carries its own cost: lower industrial output, pressure on export earnings and uncertainty for companies that need a reliable supply of energy to keep production lines running.

The government's assurance on subsidised fertiliser gives farmers some near-term protection. The bigger question for manufacturers and buyers is how long the industrial gas squeeze will last.