Egypt is using more heavy fuel oil to make gas available for export

Data published by the electricity utility and consumer protection regulatory authority in Egypt showed that the amount of carbon-intensive fuel oil used by Egypt in power plants has reached its highest level in five years, as the state seeks to boost the quantities of natural gas available for export.

Switching to the use of diesel fuel, mostly Russian production, enables Egypt to generate electricity cheaper and export more gas to alleviate a severe shortage of hard currency.

The data of the device showed that the share of fuel oil in the total input of electricity generation amounted to 20.95 percent in October.

This is the highest level since September 2017, when the share of diesel reached 22.82 percent of the fuel used to generate electricity.

In August, the Egyptian government announced a plan to rationalize electricity consumption and later said it would include limiting the amount of fuel oil used in power plants.

Data from the Joint Organizations Data Initiative (Judy) showed that the demand for fuel oil in Egypt reached its highest level in four years at 135 thousand barrels per day in September.

Fuel oil shipments from Russia to Egypt also increased this year to 2.17 million barrels in June, the highest level recorded in the shipping data on the Refinitiv platform, which began recording in April 2015.

Eugene Lendl, head of the refining products division at F.Gee.The savings were "enormous" for those outside Europe who are able to get Russian fuel at a reduced price. The West avoided importing energy from Russia in response to the Ukraine war.

Europe is also seeking to find gas suppliers instead of Russia, including importing it from Egypt, as part of the continent's attempts to stop relying on Russian supplies.

Lendl said that burning high-sulfur fuel oil is four times cheaper than burning natural gas, based on the contract price of the Dutch gas trading facilitation center(t.T.F), which is a European measurement contract, but there is a high environmental cost.

Asked about the environmental implications, Egyptian environment minister Yasmin Fouad told Reuters last month that she had no details on the amount being burned, but referred to agreements to expand renewable energy announced by Egypt while hosting the cop27 climate talks last month.

Egypt's electricity ministry did not respond to a request for comment, and the regulator has not shared its full database with Reuters.