Egypt’s threat to raise the price Israel pays for natural gas may be motivated by “political posturing” before the upcoming elections, Jules Robinson, a researcher at the University of Warwick and regional analyst, told
Interfax on Friday.
However, Robinson added that despite this posturing, the countries will have to renegotiate these contracts because of regime changes. “Israel’s gas discovery in the Levant Basin changes Israel’s requirements, and so does the changing security situation. Both these facts mean Israel will also be looking to renegotiate,” he said.
On Tuesday, Egyptian Petroleum Minister, Abdullah Ghorb said: “The final draft related to amending the prices for exporting natural gas to Israel will be completed soon. It will see a big increase in the price. Whoever pays more will receive preference for our gas,” according to quotes reported by Egypt’s Ahram news agency.
Ghorab added that the Egyptian government was altering the contract to better reflect global prices, adding that the countries were currently in negotiations. However, Robinson was sceptical of the purported reason, explaining: “As I understand it, this move is partly Egyptian political posturing before the 28 October elections, the gas renegotiation is part of this, and is a way of scoring easy points for domestic politicians.”
According to Robinson, policy which was openly hostile towards Israel was popular because “numerous suits have been brought against Mubarak since he was deposed. The public mood in Egypt is hostile to Israel, and you can’t be publicly or politically pro-Israel – it would just be a guaranteed way of losing votes,” he said.
Since Mubarak’s February deposition there have also been six attacks on the East Mediterranean Gas Company’s $500 million pipeline to Israel, which has forced the company to suspend operations since 25 July.
However, Robinson also believes economic considerations are at play. “Subsidies, mainly for energy, accounted for more than a quarter of total spending in Egypt’s 2010/11 budget. Since the overthrow of Mubarak, Egypt has lost a third of its foreign reserves and it needs money to stimulate the economy.” He added that, in addition to the unpopular gas deal between the countries, Egypt has concrete economic woes that it needs to address.
Egypt’s threat to hike Israeli gas prices may be politically motivated
However, Robinson added that despite this posturing, the countries will have to renegotiate these contracts because of regime changes. “Israel’s gas discovery in the Levant Basin changes Israel’s requirements, and so does the changing security situation. Both these facts mean Israel will also be looking to renegotiate,” he said.
On Tuesday, Egyptian Petroleum Minister, Abdullah Ghorb said: “The final draft related to amending the prices for exporting natural gas to Israel will be completed soon. It will see a big increase in the price. Whoever pays more will receive preference for our gas,” according to quotes reported by Egypt’s Ahram news agency.
Ghorab added that the Egyptian government was altering the contract to better reflect global prices, adding that the countries were currently in negotiations. However, Robinson was sceptical of the purported reason, explaining: “As I understand it, this move is partly Egyptian political posturing before the 28 October elections, the gas renegotiation is part of this, and is a way of scoring easy points for domestic politicians.”
According to Robinson, policy which was openly hostile towards Israel was popular because “numerous suits have been brought against Mubarak since he was deposed. The public mood in Egypt is hostile to Israel, and you can’t be publicly or politically pro-Israel – it would just be a guaranteed way of losing votes,” he said.
Since Mubarak’s February deposition there have also been six attacks on the East Mediterranean Gas Company’s $500 million pipeline to Israel, which has forced the company to suspend operations since 25 July.
However, Robinson also believes economic considerations are at play. “Subsidies, mainly for energy, accounted for more than a quarter of total spending in Egypt’s 2010/11 budget. Since the overthrow of Mubarak, Egypt has lost a third of its foreign reserves and it needs money to stimulate the economy.” He added that, in addition to the unpopular gas deal between the countries, Egypt has concrete economic woes that it needs to address.