Egypt's Energy Rationing System: Prioritizing Sectors in a Time of Shortage

When energy shortages hit Egypt, it's not just about cutting power to households. The government has developed a complex system to ration gas and electricity, taking into account various sectors' needs and priorities.

The approach relies on sector-specific measures, which are deployed as market conditions dictate and rolled back when pressures ease. In 2024, the oil and electricity ministries gathered supply and demand data before presenting outage options to the Cabinet, which chose between one-hour, two-hour, or no cuts.

The Oil Ministry manages fuel allocations and supplies, while the Electricity Ministry assesses system needs. When gas supplies constrained generation, the Egyptian Electricity Holding Company (EEHC) implemented load-shedding. Egas sought additional LNG cargoes in 2024, while manufacturers later asked the Egyptian General Petroleum Corporation (EGPC) to import on their behalf.

AUC professor Abdelaziz Khlaifat suggests that a rulebook should weigh more than just who earns USDs: curtailment should start with non-essential and flexible industrial users, with power generation, critical services, and strategic industries higher up the list. However, the order should flex with energy efficiency, contractual obligations, employment, and 'the time required for safe shutdown or restart.'

In August 2022, the government explicitly linked electricity conservation to diverting gas for export and bringing in FX. State buildings were mandated to switch off lighting outside working hours, streets and storefronts to use less lighting, and malls to keep air conditioning at 25°C or above.