Petroleum Minister Sherif Ismail said the prices of petroleum products and electricity are hampering investments in the field of petrol, natural gas and solar energy.
"The government will change that situation and offer new incentives to investors," he added.
"Egypt faces problem with covering its energy needs," the minister said but expressed confidence that people will unite with the government to ration energy consumption.
During a meeting with members of the American Chamber of Commerce on Monday, Ismail indicated that the average need of petroleum substances daily breaks down to 43 million liters of diesel oil, 25 million liters of gasoline, 1.2 million cylinders of butane gas and 32,000 tons of fuel oil.
Ismail also said that the use of coal is an attempt to diversify energy sources and increase production of petrol and gas. He pointed to foreign studies which estimated that the use of coal at cement plants would save approximately US$1.5-2 billion annually.
"Among the challenges facing the petroleum sector is generating electricity through natural gas, which contributes 76 percent, and through petroleum substances, 19 percent, which indicates the amount of pressure the ministry faces to meet the needs," the minister said, referring to the danger of the current situation as gas fields may stop producing at any time and negatively affect electricity production.
Petroleum subsidies increased in 2013 to LE128 billion, the ministry said, attributing the increase to a rise in consumption with stagnant prices of petroleum products. Meanwhile, international prices of oil and other products have also increased.
"Consumption of petroleum products in Egypt reached LE350 billion according to international prices. However, it costs the country LE198 billion," he added.
"The government has plans to increase petroleum product prices gradually over the coming five to six years, but they will not be sold according to international prices," Ismail added.
"The petroleum authority's debts to foreign partners increased up to US$6.3 billion in October," Ismail said, adding that US$1.5 billion is due in December.
"The ministry," according to Ismail, "is committed to paying foreign partners over the course of three years. They know Egypt fulfills its contracts and thus Egypt signed 29 agreements. Nine more will be signed soon."
"Egypt will work on modifying the price of gas that is imported according to petroleum agreements," he said. "The terms of these agreements will be reconsidered."
Edited translation from Al-Masry Al-Youm
