CAIRO: Former ambassador Ibrahim Yousry and other opposition figures filed a complaint to the Prosecutor General on Wednesday, demanding a stop to the export of gas to Israel at low prices, while Egypt is suffering from a shortage of natural gas.
Yousry told Daily News Egypt that “by exporting gas to Israel, they [the government] are violating the law and squandering public money.”
Opposition figures held a press conference at the Journalists’ Syndicate against exporting Egyptian gas to Israel before filing the complaint.
Karima Al-Hifnawy, member of the Kefaya Movement for Change called on the government to resign immediately, during the press conference.
“Those government officials who sit in their air-conditioned rooms away from the people can’t solve any problems,” she said.
Al-Hifnawy added that the Egyptian people need to speak up and fight for their rights to stop the government from exporting gas to Israel.
According to an Israeli newspaper Maariv, the Egyptian government is seeking to repurchase around 1.4 billion cubic meters of natural gas that was sold to Israel as part of a deal signed by the Minister of Petroleum Sameh Fahmy.
The newspaper quoted anonymous sources as saying that the gas would be repurchased at $14 billion, even though it was sold for $2 billion.
Yousry described this as “ridiculous” and as “a waste of public money.”
However, both Israeli and Egyptian officials have publicly denied the allegations, with Mahmoud Latif, head of Egyptian Natural Gas Holding Company, describing the claim as “false news worthy of sarcasm and surprise.”
Latif added that Egypt has enough gas to cover all its needs and does not import natural gas from any other country.
Yet last January Minister of Petroleum Sameh Fahmy said in a press conference that the ministry intends to import natural gas to compensate a shortage in domestic and industrial consumption, which sparked fury among opposition figures.
Excessive power cuts throughout Egypt since the beginning of Ramadan uncovered a clash between the Ministries of Electricity and Petroleum, where the former accused the latter of not providing enough natural gas to power the electricity plants.
Mohamed Awad, head of the Egyptian Electricity Holding Company, blamed the power cuts on the Ministry of Petroleum.
“The petroleum sector reduced the amount of natural gas used to operate the electricity generating units from 98 percent to 79 percent,” Awad said.
He added that the company was thus forced to use diesel instead, which doesn’t meet the set standards to operate the electricity generating units.
On its part, the Ministry of Petroleum rejected the accusations and said that all sectors functioning on natural gas are being supplied regularly with their needs, especially the electricity sector.
But after a joint meeting with the president and the Minister of Electricity last week, Petroleum Minister Sameh Fahmy agreed to increase the supply of natural gas and other forms of fuel to the ministry of electricity to meet its needs.
Petroleum expert Ibrahim Zahran told Daily News Egypt that “ever since we started to export natural gas in 2004, the consumption of diesel grew from 1 million tons a year to 5.5 million tons a year, which indicates that there’s a direct relationship between the two.
“Ninety-eight percent of electric generators in 2004 were powered by natural gas; now this percentage has gone down to 70 percent. Instead they use diesel, which includes sulfur, a substance very harmful to people’s health and the environment. It also causes the erosion of the electric generators, which now require more maintenance. During the maintenance the generators are out of service, which means more power cuts,” he explained.
As an emergency measure, the Ministry of Electricity had then announced a strategy of load shedding to cope with the increase in consumption during the heat of August and the peak hours of Ramadan from 7 pm to 10 pm.
The ministry also called on citizens to ration their consumption and claimed that excessive and wasteful use of electricity was one the reasons behind the power cuts.
These demands and accusations were met with public consternation, as citizens demanded a service they paid for.
The Egyptian-Israeli consortium Egyptian Mediterranean Gas (EMG) had reached a deal to export natural gas to Israel in June 2005.
The deal entailed that Egypt supply Israel with 1.7 billion cubic meters a year for 15 years at a price of $1.5 per million British thermal units (BTU), which critics said was well below international market prices.
Yousry fought a long court battle with the Ministry of Petroleum against exporting gas to Israeli at such prices. An administrative Court had initially ruled in November 2008 that exporting natural gas to Israel cannot be carried out without parliamentary approval and ordered its halt.
Later in the same month, the Supreme Administrative Court said that exporting gas to Israel was a matter of state sovereignty, adding that it should be sold according to international prices.
“The court said [Egypt’s natural gas] should not be exported as long as there is a domestic need for it, and that it must be sold at international prices,” Yousry told Daily News Egypt.
After a long legal battle, the Supreme Administrative Court authorized the sale of gas to Israel in February this year, while also maintaining that the government should monitor prices and quantity of exports.
In July 2009, a new deal was formulated whereby Egypt formally agreed to sell between 12.5 billion and 16 billion cubic meters of Liquified Natural Gas (LNG) per year to Israel for a period of between 17 and 22 years. The Cairo-based EMG will supply the gas to Israeli firm Dorad Energy for a total reported cost of between $2.1 billion and $3.3 billion.
Critics have maintained that even under the new deal, Egypt is still selling its LNG at $2.98 per million BTU, which they say is still far below the international market price.