CAIRO: The price of natural gas in Egypt is expected to rise by 75 percent in August. Natural gas and cylinders filled with liquefied petroleum gas (LPG), mainly used for cooking and heating water, are the main source of fuel for more than 75 percent of Egyptian households.
The Egyptian Cabinet took the decision this week to elevate the price for gas consumption of up to 30 cubic meters to 1.75 Egyptian pounds, up from 1 pound per cubic meter, representing a 75 percent increase.
Gas consumption between 30-60 cubic meters went up by 42.8 percent, from 1.75 Egyptian pounds to 2.50 pounds per cubic meter. Consumption of more than 60 cubic meters rose by 33.3 percent, from 2.25 pounds to 3 pounds per cubic meter.
The price of cooking cylinders, which represents a costly item on households budget for the poor, rose from 30 pounds to 50 pounds and commercial gas cylinders surged from 60 to 100 pounds.
“I really don’t know what to do now. Our lives are now moving by the grace of God. It became tough to find a job. Cylinders are now sold in Fayoum for 75 pounds, ” Hashem Mohamed, a cylinder distributor in Fayoum, told Arab News. Hashem relies on the distribution of cylinders as an extra source of income to support his family of six.
“The cylinder used to be 4 pounds during the Mubarak era and then after the revolution, it reached 11 pounds. Now it has become 50 pounds and there are clear indications that it will end at 85 pounds next month,” said Omar Youssef, a 35-year-old resident of Cairo.
Another wave of price rises is expected to hit Egyptians hard as part of the painful austerity measures the government has been applying within its economic reforms to service the country’s ailing economy.
The new price list is despite recent major natural gas discoveries. There have been two big natural gas discoveries at Noor, off the coast of North Sinai, dubbed by the Egyptian government as the largest in the region and at the Zohr field, discovered in 2015.
These discoveries, among others, are expected to change the country from a net importer to a net exporter of gas by next year.
“We heard news of the great discoveries and sufficient production by the end of 2018, which is really great. Why are the prices of natural gas rising now then? We should be expecting another chain-effect with prices growing on all products again,” Dr. Badr Abdallah, a consultant at the University of Assiut, told Arab News.
Earlier in June, the Egyptian authorities announced the new fuel prices as part of its plan to lift subsidies. There was a 34 percent increase in the price of octane gasoline, 92 octane gasoline increased from 5 pounds to 6.75 pounds (from $0.28 to $0.38) per liter and 80 octane gas increased from 3.65 to 5.5 pounds (from $0.20 to $0.31). There was a 17.5 percent increase in 95 octane gasoline, which increased from 6.6 pounds to 7.75 pounds (from $0.37 to $0.43)
Authorities have also increased the price of drinking water by up to 45 percent, electricity by 26 percent, and raised metro fares 250 percent in May. The metro fare price rise was met with some protests.
Following the 2011 uprising that toppled former President Hosni Mubarak, the economy of Egypt has been struggling. Egypt’s President Abdel-Fattah El-Sisi declared that Egypt’s spending to cover fuel, food and electricity is measured at $18.6 billion a year and plans to slash these figures. While the minimum salary has stayed the same during the last four years, the price of diesel has increased fivefold, cooking gas rose by 16 fold and 92 octane gasoline by 360 percent.
In 2016, Egypt secured a three-year $12 billion bailout loan from the International Monetary Fund by agreeing to austerity measures that included currency floatation, cutting subsidies and raising the value-added tax.
The current fiscal year 2017/18 looks promising according to the government’s optimistic view on the economy, targeting a 5.8 percent growth rate compared to the current 5.2 percent, as well as lowering the budget deficit from 10.9 percent in the fiscal year 2016/17 to 8.4 percent.
Egypt’s natural gas prices rise despite major discoveries
Egypt’s natural gas prices rise despite major discoveries
Saudi Arabia’s ICT spending surges 20% to $11bn
RIYADH: Saudi Arabia has witnessed a 20 percent year-on-year increase in government spending on information and communications technology in 2023, reaching SR41.87 billion ($11.16 billion), according to new data.
The latest report from the Kingdom’s Digital Government Authority revealed that the increase in spending has contributed to enhancing the efficiency of digital government services and improving the experience of beneficiaries.
Additionally, this investment has had a positive impact on the digital economy, marking a milestone in the Kingdom’s transformation journey.
“ICT spending is one of the supporting factors for innovative and flexible solutions that we aspire to provide to all citizens and residents of Saudi Arabia, ensuring the effectiveness of the immense human wealth that populates the country and achieving a high quality of life,” said Faisal bin Ahmed Bakhshwin, deputy minister for digital transformation at the Ministry of Human Resource and Social Development.
On the other hand, Musaed Al-Otaibi, deputy minister for digital transformation and smart cities at the Ministry of Municipal and Rural Affairs and Housing, emphasized: “Digital transformation is one of the pillars of our work at the ministry. ICT spending has enabled us to provide mature and high-quality services with added value through innovative models for citizens.”
Al-Otaibi stated that the ministry continues to strive to improve services and meet the needs of urban residents by providing services that enrich and facilitate their daily lives.
The deputy minister mentioned the government’s attention and interest in citizens’ feedback, incorporating it into the design of suitable services.
Al-Otaibi explained that the ministry aims to achieve a “higher quality of life and enhance innovation in service development” by using emerging technologies that reduce service implementation time and increase operational efficiency for the sector.
The report revealed that government ICT expenditure between 2019 and 2023 totaled an estimated SR120.15 billion, reflecting an overall upward trend. This indicates growth in the field and investment in transformational projects within this vital sector.
The DGA data revealed that over a five-year period, the health and social development sector accounted for the highest portion of government ICT spend, totaling SR20.14 billion or 17 percent of the total expenditure.
Moreover, the military came next as the Kingdom’s technology spending in the sector reached SR19.92 billion from 2019 to 2023, accounting for 17 percent of the total expenditure during the period.
The infrastructure and transportation sector followed, with ICT expenditure totaling SR18.22 billion during the period, reflecting 15 percent of the total amount.
According to the report, over the past five years, Saudi Arabia has witnessed a significant and sustained increase in expenditure on cloud computing and emerging technologies such as artificial intelligence, big data, and the Internet of Things.
This growth reflects the Kingdom’s aspirations to become a global hub for technological innovation and digital services, as envisioned in the pillars of Vision 2030.
Middle East IPO market set for continued growth in 2024: PwC
RIYADH: Initial public offerings in the Middle East are poised for continued positive aftermarket performance this year, following significant post-IPO gains in the first quarter, a new report stated.
PwC’s latest IPO+ Watch report highlighted the Saudi Stock Exchange’s emergence as a dominant force in Gulf Cooperation Council equity market launches activity, hosting the majority during the quarter, underscoring the region’s attractiveness to investors seeking dynamic opportunities.
“Tadawul is reported to remain the most active exchange in the GCC with all but one IPOs taking place on either Tadawul main market or the Nomu parallel market,” the report stated.
On the primary market, three IPOs garnered a combined total of $667 million, while on the secondary market, six offerings raised $57 million in total.
Notable among the recent successes are MBC Group Co. and Avalon Pharma, both witnessing substantial market gains.
However, the report noted that the market’s attention has been captured by the demand for Dubai Parking, which set a new record for subscription levels at the Dubai Financial Market, being oversubscribed by 165 times.
The offerings landscape in the Middle East during the first three months of this year was characterized by activity across various sectors, showcasing a diverse range of investment opportunities.
From consumer markets with companies like Parkin Co. and Modern Mills for Food Products Co., to health industries represented by Avalon Pharma, and technology, media, and telecommunications with MBC Group Co., the IPO wave has touched multiple sectors.
Additionally, smaller-scale market debuts were observed in the financial services, industrials, manufacturing, and automobile sectors.
Muhammad Hassan, capital markets leader at PwC Middle East, expressed optimism, citing Parkin’s oversubscription and double-digit post-IPO gains as indicators of sustained positive momentum.
“We expect the privatization agenda across the GCC, combined with the ambition of private family businesses to go public, will continue to drive issuance supporting positive momentum in GCC IPO activity in 2024,” he added.
Looking ahead, the report anticipated continued strength in the public flotation landscape for the remainder of 2024, buoyed by a robust pipeline.
Private sector companies seeking liquidity and access to capital are expected to drive much of this activity, with Saudi Arabia and the UAE leading the charge. Nevertheless, there’s growing momentum in markets like Oman and Qatar, signaling a broader regional expansion of IPO activity.
Qatar Investment Authority commits to supporting France’s semiconductor sector
RIYADH: Qatar will venture into France’s tech industry as a major investment body announced its intent to anchor a financial commitment in Ardian Semiconductor.
This move marks the Qatar Investment Authority’s participation in a pioneering thematic fund designed to enhance the semiconductor industry in Europe. It highlights its role as a preferred financial partner in key technology subsectors, including supply chain developments.
QIA’s strategic focus on this sector reflects its belief in the critical role semiconductors play in driving digital and green transformations across vital industries such as artificial intelligence, mobility, and consumer technology, according to an official release.
This initiative is part of QIA’s broader investment strategy to engage with leading businesses at the forefront of innovation.
Notably, QIA’s interest in the semiconductor value chain includes a recent minority stake in Japan’s Kokusai Electric Corp., a leader in semiconductor manufacturing, taken in June 2023, underscoring its ongoing commitment to significant investments in this area globally.
Furthermore, on May 13, QIA announced its plan to significantly expand its investment partnership with Bpifrance by as much as €300 million ($323 million), reinforcing their joint commitment to stimulating economic growth and innovation in France.
This enhancement marks a pivotal development in their collaboration, initially established through the Future French Champions joint venture.
The first phase of this partnership, concluded in 2021, effectively channeled almost €300 million into supporting job creation, economic development, and particularly bolstering the French small and medium-sized enterprises sector.
Building on these achievements, both entities progressed to the second phase of their collaboration in January 2023, committing an additional €300 million.
They now plan to embark on a third phase, pledging up to another €300 million once the current funds are fully deployed.
The renewed partnership will focus on strategic priorities such as artificial intelligence, semiconductors, quantum computing, healthcare, aerospace, and energy transition.
These investments are intended to advance technological capabilities, enhance competitiveness across various sectors, and promote sustainable growth, reflecting both parties’ commitment to driving significant innovations and supporting France’s long-term economic objectives.
OPEC sticks to oil demand view, sees improvement in global economy
RIYADH: The Organization of the Petroleum Exporting Countries stuck to its forecast for relatively strong growth in global oil demand in 2024 on Tuesday and said there was a chance the world economy could do better than expected this year.
In its monthly report, OPEC said world oil demand will rise by 2.25 million barrels per day in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.
Demand for members of the Organization of Economic Co-operation and Development is projected to expand by nearly 0.3 million bpd, while the non-OECD is forecast to grow by about 2 million bpd.
This is the last report before OPEC and its allies, known as OPEC+, meet on June 1 to finalize output policy. The oil alliance, in its report, sounded an upbeat tone on the economic outlook.
“Despite certain downside risks, the continued momentum observed since the start of the year could create additional upside potential for global economic growth in 2024 and beyond,” OPEC said.
The world economic growth forecasts for 2024 and 2025 remain unchanged at 2.8 percent and 2.9 percent, respectively.
The report slightly revised up the US growth forecast for 2024 and 2025 to 2.2 percent and 1.9 percent respectively.
“The economic growth forecast for the eurozone remains at 0.5 percent for 2024 and 1.2 percent for 2025,” it added.
It kept China’s economic growth forecast at 4.8 percent in 2024 and 4.6 percent in 2025. Russia’s economic growth for 2024 is revised up slightly to 2.3 percent, while the forecast for 2025 remains at 1.4 percent.
According to the report, refinery margins in April continued to trend downward as the recovery in refinery processing rates and stronger product output weighed on product markets.
ITFC’s new initiative promises to boost economic and trade growth in Central Asia
RIYADH: Economic and regional integration among the six Organization of Islamic Cooperation member countries is set to grow with a new program from the International Islamic Trade Finance Corp.
The Trade Connect Central Asia+ Program, also known as TCCA+, was launched recently by ITFC, a member of the Islamic Development Bank Group, during the third Tashkent International Investment Forum. It is poised to enhance economic growth in Kazakhstan, Kyrgyzstan, and Tajikistan, as well as Turkmenistan, Uzbekistan, and Azerbaijan.
The region, which boasts one of the world’s largest energy resources and significant production capacities in energy and agriculture, currently lacks the trade markets needed to harness its full potential, according to a press release.
In a statement at the launch, Hani Sonbol, CEO of ITFC, said: “We are immensely proud to launch the TCCA+ Program, which represents a significant step forward in enhancing economic cooperation and boosting trade across the Central Asia region and beyond.”
He stated that this initiative is designed to unlock the vast economic potential of the region by facilitating increased regional trade and investment.
“With a focus on the energy and agriculture sectors, we are committed to fostering sustainable economic growth and regional integration that benefits all member countries involved,” added Sonbol.
Focused on boosting regional trade and expanding the export base toward higher value-added products, the TCCA+ Program is anticipated to foster inclusive and sustainable economic growth, alongside promoting regional economic integration among the six targeted countries, the release added.
This objective will be accomplished through the enhancement of export and investment capabilities, the reinforcement of competitiveness, and the facilitation of trade initiatives and regional value chains.
For his part, Uzbekistan’s Minister of Investments, Industry and Trade Laziz Kudratov was quoted in the statement saying: “We are honoured to host the launch of this transformative economic initiative, following the development and progress made at last year’s Forum. We are united with ITFC in our shared goal to unlock the immense investment potential in Uzbekistan, and strongly support their efforts to drive economic prosperity across the wider region.”
