Egypt increases gasoline prices in line with global levels

Egypt raised domestic gasoline prices early on Thursday, bringing them more in line with global levels but risking further public discontent after a year of rising inflation, a weakening currency and a series of austerity measures, said Hydrocarbonprocessing.

The North African nation reaffirmed its commitment to push through fuel price increases to receive a financial support package agreed with the International Monetary Fund (IMF) in December. Egypt had been bringing fuel prices closer to international levels only for a series of currency devaluations to undermine the process over the past year. The Egyptian pound has fallen by nearly 50% against the dollar over the past 12 months.

The country's fuel pricing committee left the diesel price unchanged, the petroleum ministry said in a statement, but raised the price of 80-octane petrol by 0.75 Egyptian pounds, 92-octane petrol by 1 pound and 95-octane petrol by 0.75 pounds to 8.75 Egyptian pounds (USD0.29), 10.25 and 11.50 per litre, respectively. The diesel price was kept at 7.25 pounds per litre.

Diesel is now about 50% lower than international prices and 95-octane petrol about 40% lower, said Allen Sandeep of Naeem Brokerage. EFG Hermes economist Mohamed Abu Basha estimates that the increases could increase headline inflation by 0.2 to 0.3 percentage points. Inflation hit a five-year high of 25.8% in January.

"Gasoline prices were raised, but diesel unchanged. So it should not have a big impact on inflation," Abu Basha said. A rise in the prices of global commodities including wheat and oil after Russia's invasion of Ukraine last year added to financial pressures on Egypt, driving it to seek a rescue package from the IMF.

In July 2022 the government announced a rare increase to the price of diesel but said it was still subsidising the fuel at the rate of about 55 billion Egyptian pounds per year. Pricing of fuel has been set under quarterly reviews since 2019, taking account of global markets and the exchange rate, in line with previous commitments to the IMF.

We remind, BP has signed a memorandum of understanding with the Egyptian government with the aim of establishing a large-scale renewable hydrogen production facility in the North African country. BP is to evaluate the technical and commercial feasibility of developing an export hub in Egypt, exploring high-potential locations across the country for renewables.

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Dow and X-energy have signed a joint development agreement (JDA) to develop a nuclear small modular reactor (SMR) at one of Dow’s US Gulf Coast sites, said the companies.

Dow, the world’s leading materials science company, and X-Energy Reactor Company, LLC (“X-energy”), a leading developer of advanced nuclear reactors and fuel technology for clean energy generation, announced today their entry into a joint development agreement (“JDA”) to demonstrate the first grid-scale advanced nuclear reactor for an industrial site in North America.

As a subawardee under the U.S. Department of Energy’s (DOE) Advanced Reactor Demonstration Program (“ARDP”) Cooperative Agreement with X-energy, Dow intends to work with X-energy to install their Xe-100 high-temperature gas-cooled reactor (“HTGR”) plant at one of Dow’s U.S. Gulf Coast sites, providing the site with safe, reliable, low-carbon power and steam within this decade. The JDA includes up to USD50 million in engineering work, up to half of which is eligible to be funded through ARDP, and the other half by Dow. The JDA work scope also includes the preparation and submission of a Construction Permit application to the U.S. Nuclear Regulatory Commission (NRC).

Nuclear SMRs could play an important part in decarbonising the chemical and other industries, and may eventually power electric cracking.

X-energy, based in Rockville, Maryland, is a developer of advanced small modular nuclear reactors and fuel technology for clean energy generation.

We remind, Dow intends to construct the sector's first net-zero carbon emissions ethylene and derivatives complex with respect to scope 1 and 2 carbon dioxide (CO2) emissions, at its Fort Saskatchewan (Alberta, Canada) site. The project involves a new 'net-zero carbon emissions' ethylene cracker at the site, set for launching by 2027. It would expand Dow's ethylene and polyethylene capacity by over 200% from its Fort Saskatchewan site, while retrofitting the site's existing assets to net-zero carbon emissions.

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Brazil’s mines and energy ministry (MME) has requested that federal oil firm Petrobras halt the sale of assets for 90 days starting March 1, according to a company press release.

The request was made due to the reassessment of the national energy policy and the establishment of a new composition of the national energy policy council (CNPE), which is part of the ministry.

Last week, a decree signed by President Luiz Inacio Lula da Silva and energy minister Alexandre Silveira mandated representation of six new ministries on the CNPE board: finance; transport; agriculture and livestock; science, technology and innovation; environment and climate change; and integration and regional development.

The suspension of some Petrobras divestments had been expected, as Lula considers it of strategic importance that the company remains an integrated up- and downstream group. Since Lula’s election in October, the company canceled the sales of its Araucaria Nitrogenados (Ansa) fertilizer plant, in Parana, the Gabriel Passos (Regap) refinery, in Minas Gerais, and the Canoas gas and diesel-fired thermal plant, in Rio Grande do Sul.

Among other mid- and downstream assets that are included in Petrobras’ divestment program are the Abreu e Lima (Rnest), Presidente Getulio Vargas (Repar) and Alberto Pasqualini (Refap) refineries, besides the Braskem petrochemical company, Transportadora Bolivia Brasil de Gas (TBG) and the Tres Lagoas nitrogen fertilizer plant (UFN-III).

Regarding the upstream segment, Petrobras is selling a number of mostly shallow water and onshore exploration blocks and fields, as it prioritizes deep and ultra-deepwater assets. In the biofuels area, Petrobras has started the sale process of its Petrobras Biocombustivel (PBio) subsidiary in 2020.

Oversea assets, such as the Tayrona block, in Colombia, and Petrobras Operaciones (Posa), in Argentina, are also for sale. All these processes are likely to be reviewed by Petrobras’ board, controlled by a federal administration that is expected to modify its current business plan.

In charge of Petrobras since February, CEO Jean Paul Prates intends to better insert Petrobras into the energy transition, potentially increasing investments in renewable energy and biofuels. In a statement, Petrobras said its board will analyze the divestments in progress, “from the standpoint of civil law and within the rules of governance, as well as any commitments already made, their punitive clauses and their consequences."

In this way, the company wants its governance bodies to assess potential legal and economic risks, subject to secrecy rules and other regulations.

We remind, Petroleo Brasileiro SA stepped up security at its refineries in a precautionary measure after threats against assets, including Brazil's biggest fuel plant. The threats were detected by Petrobras' intelligence unit monitoring social media communications of supporters of Brazil's far-right former President Jair Bolsonaro, the two people said. The state-controlled company said on Sunday night all its assets and refineries were operating normally.

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DAK has announced that it will be shutting down its Cooper River, South Carolina, PET site, said the company.

The PET resins operations at the Cooper River site have shut down indefinitely as of 1 March. PET can be compounded with glass fibre for the production of engineering plastics.

We remind, DAK has announced a 10 cent/lb price increase for polyethylene terephthalate (PET) citing an increase in paraxylene (PX) prices effective 1 June 2022. Increases in blendstock values as well as an increase in demand for gasoline in the summer months has put upward pressure on PX prices. This increase in demand for gasoline has resulted in refiners limiting operating rates at their toluene disproportionation process (TDP) units due to higher blendstock and gasoline prices, making it uneconomical to transform toluene into xylenes, including PX.

DAK Americas, Indorama, Nan Ya Plastics Corporation and Far Eastern New Century (FENC) are PET producers in the US.

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North American chemical railcar traffic rose 0.9% year on year to 45,887 loading for the week ended 25 February – marking the first increase after 22 straight declines, according to the latest freight rail data by the Association of American Railroads (AAR).

Loadings rose in Canada and Mexico but continued to fall in the US. For the first eight weeks of 2023 ended 25 February, North American chemical rail traffic was down 4.0% year on year to 357,193, with US traffic down 8.0%, to 253,310 loadings.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

We remind, North American chemical railcar traffic fell for a 21st straight week, with loadings for the week ended 11 February down 2.6% year on year to 46,254, led by a 5.8% decline in the US. For the first six weeks of 2023 ended 11 February, North American chemical rail traffic was down 5.2% year on year to 264,053 railcar loadings, with US traffic down by 9.1%, to 187,166 loadings.

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