Egypt Gas Chief: Government Not Involved in Decision to Cut Off Supply to Israel

Egypt's move to terminate deal is another reflection of the country's chaotic situation on eve of presidential elections, and may also constitute economic suicide.

Egyptian engineer Hani Dahi, executive director of the Egyptian General Petroleum Corporation, said on Monday that the military council and the government had no part in the decision to terminate Egypt's agreement to provide natural gas to Israel.

According to Dahi, the decision was made following a business dispute with Israel, and has nothing to do with politics. He added that the Israeli side has not fulfilled its economic obligations, despite repeated requests.


Mohamed Shoeb, head of the Egyptian Natural Gas Holding Company, announced Sunday evening that the company will terminate its agreement to provide natural gas to Israel, after a decision had been made on Thursday due to what he termed “Israel’s repeated breaching of the agreement.”

Just Sunday, presidential hopeful Hamdeen Sabahi said that if elected he will cancel the gas deal.

Israeli security officials said that Egypt has not provided clear answers on the matter, and that during talks in Cairo Egyptian officials refused to confirm or deny the decision.

Despite Dahi's statements, it remains unclear whether the Supreme Military Council knew about the decision. It may have been an independent step taken by the Egyptian gas company as the economic situation in Cairo remains unstable.

It seems that on the eve of the Egyptian presidential elections, the situation on the ground has never been so chaotic: Egypt still does not have a constitution defining the president's authority, and it remains unclear who will lead the committee to draft such a document. On Sunday, in a bid to calm public sentiment, a senior Military Council member said the elections will take place as planned and that authority will be fully transferred to the elected official.

It is also unclear whether the decision to terminate the gas supply would affect U.S. assistance to Egypt. Congress has recently warned that its assistance depends on maintaining the peace accords with Israel, yet did not list the gas agreement as one of the conditions. U.S. assistance to Egypt amounts to approximately 1.3 billion dollars in military aid and an additional 300 million dollars in economic aid.

The announcement by Egypt's petroleum company (EGAS) constitutes a virtual suicide act by Cairo. One could have expected that a country which lost most of its tourism revenue over the last year (its most important source of income other than the Suez Canal), suffers from a high poverty rate and lack of foreign investments, would hold on to a significant source of income. Under the agreement, Egypt began delivering gas to Israel in 2008 in a framework of a 2005 political agreement which has significantly enriched Egypt's coffers.

And yet in the context of the growing anti-Israel sentiments in Egypt, the decision comes as no surprise. In recent days, Muslim Brotherhood leaders have launched a smear campaign against Egyptian Grand Mufti, Ali Gomaa for visiting Jerusalem's al-Aqsa mosque last week – apparently with the Israeli authorities' consent.

Thus, the decision to terminate the gas deal seems more business-oriented than political. Yet in light of the voices in Egypt in the past year – condemning the gas deal for the cheap price Israel enjoys - it is likely that the heads of the Egyptian gas company will receive many praises for holding up "Egyptian interests." If not money, at least glory.