Egypt's Energy Problems Worsen

Egypt is expecting severe power outages in upcoming months after suffering rare winter blackouts. According to the Ministry of Petroleum, Egypt needs to import $1 billion worth of natural gas in the next few months to satisfy demand this summer. However, political, financial and infrastructure constraints will likely keep Egypt from achieving this goal. Last summer, as seven-hour-long rolling blackouts affected businesses and consumers throughout the country, the Tamarod movement helped to oust President Mohammed Morsi, a move that illustrated people's outrage over the Muslim Brotherhood's inability to solve Egypt's energy problems. As Egypt's rapidly growing population continues to demand more natural gas, domestic production will soon fail to meet the needs of a nation looking for political stability and economic growth under a new democratic government that is set to be elected in the coming months.

Like Morsi's government, the incoming administration will have limited options, given tensions in the region and its political and economic constraints. Perhaps most important, Cairo will have to decide whether it will decrease domestic natural gas consumption to fulfill its export obligations or pump more gas into a heavily subsidized domestic market to forestall summer outages — and thus curry favor with the public. Both options have significant ramifications on the country's struggling economy.