CAIRO: The Egyptian Ministry of Petroleum is negotiating with industrial sector companies to approve settlements through which factories are obligated to pay debts owed for gas consumption.
A government source said that the Ministry of Petroleum will waive lawsuits filed against the factories and prepare to notify all companies of reconciliation in cases with the signing of settlement agreements.
The move is part of government plans to lift burdens on manufacturers, the source said.
The source added that the committee formed with the Egyptian Federation of Investors Associations and the Ministry of Petroleum will present the time period for repaying the debt during its next meeting. It is expected to range between 10 and 12 years.
He said that the ministry is keen to return factories to work at full production capacity in accordance with the directives of political leadership to push industrial production as a basic pillar of growth of the Egyptian economy during the 2030 development plan.
Sobhi Nasr, a member of the board of directors of the Tenth of Ramadan Investors Association, said that the committee will hold a meeting at the end of December to study settlement procedures.
During the first meeting of the committee, the Ministry of Petroleum rejected a request by the Egyptian Federation of Investors Associations to schedule factory gas debts over a period of 15 years. The ministry also repeated its plans to develop gas networks.
Nasr added that there was a possibility of 10-year installments, provided that arrears would be paid on a monthly basis and gas supply stopped in case of payment issues.
He said that the ministry also refused to drop interest on arrears in installments during that period, and postponed discussion regarding canceling penalties in other cases.
According to the ceramic division, the total debts of gas bills owed to oil companies is estimated at 6 billion Egyptian pounds ($381 million).
The government reduced gas prices for the industrial sector twice within 12 months. The first came in October of last year, targeting consumption-intensive factories, while the second took place in March this year as part of a pandemic stimulus package for the private sector.
The government sells gas to factories at a price of $4.5 per million thermal units. Factories have repeatedly demanded that the price be reduced to equal the global price of gas, which is less than $3 per million thermal units.
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