It is the perfect type of business deal to go wrong. The Egypt-Israel gas pipeline is ready, but the gas, sold at a secret rate, is irritating the noses of Egyptian public opinion.

By Daikha Dridi, Cairo

After a month of pressure from public opinion, Egyptian Prime Minister, Ahmad Nazif, ended up announcing that his government is renegotiating to raise the price of gas sold to Israel. It all began on 1st May when the press announced that the connection of a gas pipeline between Egypt and Israel had finally been installed. The news came as a double shocker. Not only was Egypt selling natural gas to Israel, a country currently responsible for occupying Gaza, but, on top of that, the price of the gas is so low that the press has described it as “subsidised gas”. The sales contract for gas between Egypt and Israel dates back to 2005 and provides for the sale of 1.7 billion cubic metres of gas per year. This figure represents 20% of Israeli consumption of electricity. The fifteen-year contract is likely to have the quantity of gas increase by 25% and may also be extended by 5 years. This is all that is officially known about the transaction that seems to be putting Ahmad Nazif’s government in a quandary. Indeed, the Prime Minister refused to answer angry questions launched by Egyptian members of parliament about the exact price of the gas sold to Israel.

The precedent to the Alexandria refinery

It is important to highlight that the parliamentarians’ rancour is not only that of the Muslim Brotherhood as no one really understands why Israel is being allowed to buy gas so cheaply that it would be necessary to hide the actual price – and this while the amount paid by Egyptian consumers continues to rise. The Energy Minister who faced several snarls in parliament, eluded the question, explaining that it would be illegal to make that kind of information public without the consent of both parties, consortium, East Mediterranean Gas (EMG), owned by Egyptian businessman and close associate of President Hosni Moubarak, Hussein K. Salem and Israeli Yossi Maiman, head of the Mehrav group. Both businessmen have been information officers in their respective countries, and have partnered previously in the 90s in the construction of an oil refinery in Alexandria – a project from which the Egyptian government discretely removed Israeli involvement by buying up the latter’s shares after intense public outcry at the height of the second Intifada in 2001.

Indeed, this movement marks the coordination of nearly 8,000 citizens implemented by the nephew of deceased president Annouar Sadate and former member of parliament Esmat Sadate as well as his brother, only just released from prison, Talaat Sadate.  

Sawiris discourages gas exportation

Today, the sale of Egyptian gas to Israel is provoking a great deal of criticism within a social context that has become explosive due to strikes and protests against price increases. Furthermore, Egyptians have had little time to forget the distress of the thousands of Palestinians who fled to Sinai in January seeking food and fuel. The criticism was expressed diplomatically by Egyptian energy experts and businessmen such as Orascom head, Naguib Sawiris. Sawiris recommended “the good use of Egyptian natural gas in Egypt”, discouraging exportation. Other opinions are more measured, arguing only that the rules of fair market play have not been applied in this deal with Israel. Last but not least is the position of the most virulent and largest group of opponents: from an ethical point of view, how can Egypt sell gas to a state that is strangling Palestinians in Gaza, obliging them to fill their gas tanks with cooking oil due to an Israeli blockage. This “gift to commemorate Israel’s 60th birthday”, as described by an Egyptian member of parliament, is clearly not being well received and initiatives within and without the “people’s campaign against the sale of gas to Israel” are increasing. Indeed, this movement marks the coordination of nearly 8,000 citizens implemented by the nephew of deceased president Annouar Sadate and former member of parliament Esmat Sadate as well as his brother, only just released from prison, Talaat Sadate.

Al Azhar is getting involved

The leaders of this campaign plan to hold protest marches, starting on 5th June, the anniversary of the “naksa” of 1967. The are circulating a petition to gather a million signatures and, in the interim, have attempted to organise a people’s court to judge the Prime Minister, the Minister of Energy, and business mogul Hussain Salem. A fatwa “prohibiting the fruit of work to companies that sell gas to Israel” has been pronounced by a group of ulemas of Al Azhar who regularly oppose cheihk Al Azhar, forcing him to simmer in total silence because of his close ties to the government. Lastly, newspapers have reported that the “security within the export company in Sinai was hurriedly reinforced” in order to prevent any serious strike there. The terms of the transaction are therefore going to be renegotiated. But will this be enough to evade the political question surrounding the sale of gas to Israel?