Abstract:
This working paper examines the pricing of petroleum products and natural gas, which together accounted for 96% of Egypt’s energy mix in 2025. The analysis compares Egypt’s pricing mechanisms with those applied internationally and proposes reforms aligned with international best practices. The study found a clear gap between the pricing mechanisms for petroleum products and natural gas in Egypt and prevailing international practices. This gap has resulted in a lack of transparency in the pricing system, exacerbating uncertainty and precautionary behavior, which in turn fuels further inflationary pressures. Addressing the weaknesses in Egypt’s energy pricing system requires the adoption of several key reforms, most notably: establishing a transparent and predictable pricing framework for all components of the energy mix; regularly updating the petroleum products pricing formula and publicly announcing clear guidelines for natural gas pricing; adopting a clear, time-bound plan for energy pricing reforms; and addressing the fragmentation of strategic planning in the energy sector through stronger institutional integration among relevant ministries to ensure coherence and consistency of objectives, facilitate implementation, and strengthen monitoring and evaluation.
