Latest news with #OsamaKamal
Tahya Masr
18-04-2025
- Business
- Tahya Masr
Nutanix And Dell Cloud Computing Forum Discusses AI Role In Transforming Global Economies
One of the most important sessions of Egypt's first Cloud and AI Day, hosted by Nutanix and Dell Technologies, featured a panel of technology leaders and experts in digital transformation and artificial intelligence discussing the role of AI in reshaping global economies, including opportunities and challenges. The debates were moderated by media celebrity Osama Kamal, who emphasized the importance of implementing national AI plans that protect Egyptian social identity and economic interests at both the governmental and private sectors. Eng. Mahmoud Badawy, Advisor to the Minister of Communications and Information Technology for Digital Transformation; Eng. Ayman El Gohary, a digital transformation expert; Eng. Mohammad Abulhouf, Vice President and General Manager for Emerging Markets at Nutanix, Mr. Sherif El Beheiry, Chairman of Misr Digital Innovation; and Eng. Ayman El Marakby, Pre-Sales Director at Dell Technologies in Egypt and Saudi Arabia, all attended the session . Eng. Mahmoud Badawi, Advisor to the Minister of Communications and Information Technology for Digital Transformation, discussed the Egyptian market's preparation for huge worldwide advancements in artificial intelligence. He stated that the government is working on numerous AI concerns, including whether to enact AI law. Meanwhile, the Ministry of Communications prioritizes promoting the AI sector and has provided training in several disciplines. He noted that AI preparedness is assessed using the availability or absence of skills on which the government is working. It also looks at the legislative framework, which the ministry is also researching, as well as the technology and infrastructure needed to support the expansion of AI and finally looks at its numerous uses in both the public and commercial sectors. The ministry is also investigating ways to boost AI entrepreneurship . He noted that AI preparedness is measured by the availability or absence of skills on which the government is working. It also looks at the legal framework, which the ministry is also reviewing, as well as the technology and infrastructure needed to support the expansion of AI and finally focuses on numerous uses in both the public and commercial sectors. The ministry is also investigating ways to assist entrepreneurship in the AI industry. As a digital engineer, he shared his own perspective on the discrepancy in nations' expenditure on technology, artificial intelligence, and digital transformation, and how this is offset by countries that spend less on technology. Therefore, Eng. Mahmoud Badawi thinks that small countries must rely on human capacities to grow and spread, ensuring that everyone can develop and produce software. This enables smaller nations to benefit from huge technical capabilities on a big scale, as well as increased penetration of small entities in comparison to the restricted, larger organizations inside larger countries . Furthermore, he emphasized the importance of investing in artificial intelligence and its capacity to handle Egyptian vernacular languages, so that the local market may benefit more completely. He also highlighted the necessity for the state, through both public and private enterprises, to build local AI applications as well as produce and export AI tools and apps. For his part, Ayman El Gohary, a digital transformation expert, discussed the future path of educating people or robots using artificial intelligence. El Gohary believes that AI is defined in several sectors depending on the applications that are intended for implementation in different areas. Small businesses are now recognized for their ability to communicate and exploit opportunities in collaboration with large organizations in the field of artificial intelligence. Today, artificial intelligence has a broad impact, and robots will learn for themselves rather than be taught. Humans must learn how to interact with and benefit from artificial intelligence, which may reduce labor capabilities in certain industries while improving it in others. He additionally tackled the quick advancements in artificial intelligence and the best moment for organizations to decide to invest in AI, which may transform tomorrow and necessitate changes to existing systems and new investments. El Gohary said that organisations' technology investment decisions differ from one another depending on the nature of their activity, with some activities necessitating the rapid adoption of AI-powered technology. In general, businesses must stay up with innovations on a continuous basis and invest in technology, including AI, to improve their company processes. Their failure to invest in AI will not lead their company to fall behind competitors that do. Eng. Mohammad Abulhouf, Vice President and General Manager for Emerging Markets at Nutanix, suggested that keeping up with AI expenditure is a huge issue that demands a strong desire to change since it is in the public interest. As a result, it is vital to identify the intended needs for AI use, which is the most pressing issue today because not everyone understands what they need from AI. There are several applications and scenarios for AI that may be used . He went on to say that there are international and governmental rules for the use of AI, and that institutions must have internal controls in place to employ AI successfully. AI processes must be controlled to define tasks and produce optimal outcomes . He underlined the insurance risks that have evolved as a result of the use of artificial intelligence. According to Abulhouf, hackers are also studying the use of AI, but there is no need to avoid AI due to worries about increased insurance risks. Rather, communities must be educated on AI risk mitigation strategies, as well as made aware of AI-driven assaults. On the other hand, Mr. Sherif El Beheiry, Chairman of Misr Digital Innovation, spoke about the challenges involved with the current shift to digital banking. El-Beheiry stated that it is natural to use new technology while building a new bank. The advantage is complete freedom in building the required infrastructure to support the digital bank's business model, as well as the ability to constantly adapt and develop that infrastructure. However, AI cannot currently decide whether to award or reject consumer credit. Yet, in the future, artificial intelligence may be created to make similar judgements. As a result, operational guidelines and the construction of digital banks must be highly flexible. Moreover, He reinforced that the major goal and criteria is to examine insurance operations, which are the backbone of bank operations and need the highest level of client confidence. Spending, particularly on improving insurance operations, continues a continuous basis, rather than only upon inception. No bank president concludes his day by assuring profitability; instead, he prioritizes insurance and security elements in all their manifestations. Previously, credit risk was the most major concern; but, with the advent of technology, cybersecurity risks have emerged as the most important and critical issue since their dimensions are unknown and cannot be physically assessed, similar to credit risk. Eventually, Eng. Ayman El Marakby, Pre-Sales Director at Dell Technologies in Egypt and Saudi Arabia, underscored that all technologies require time to propagate to all individuals. Even artificial intelligence began decades before it became well known and had so many open and free resources. It has been 26 years since its development. However, when it comes to quantum technology, we believe that countries should prioritize the use of quantum technology tools in the insurance sector, while companies and private sector institutions should expand their use of defensive artificial intelligence in a variety of fields, as this is the path to the use of new technologies in the future .
Al-Ahram Weekly
25-03-2025
- Business
- Al-Ahram Weekly
Egypt on the way to another inevitable fuel price hike
Amid the mounting economic pressure resulting from the implications of global and regional geopolitical tensions and under a commitment to ongoing reforms, Egypt is again facing the complex challenge of fuel price hikes. With global factors, rising costs, and a loan programme with the International Monetary Fund (IMF), the government is preparing for a critical decision regarding fuel prices. As a key meeting looms in April 2025, the question arises: will Egypt take another step towards fuel price liberalization, and how will it balance the anticipated hike with commodities prices in the local market? Energy subsidies: A daily nightmare The current situation is extremely difficult economically, politically, and socially due to the repercussions of the Israeli war on Gaza, Osama Kamal, former minister of petroleum and mineral resources, told Ahram Online. He emphasized that energy subsidies remain a nightmare with negative economic impacts. Kamal noted that the daily cost of energy subsidies is overwhelming. "The subsidy for diesel alone exceeds EGP 750 million daily, while the subsidy for various types of gasoline is estimated at EGP 250 million, with butane gas cylinder subsidies being approximately the same. Subsidies for gas and mazut used in electricity have exceeded EGP 1 billion daily," he explained. He pointed out that the heavy reliance on importing gas and mazut to meet the local electricity needs increases the budget pressure while turning to renewable energy could have been a less costly and more sustainable alternative. According to Ministry of Finance data, the government allocated EGP 154 billion for fuel product subsidies in the current FY2024/2024, which ends on 30 June 2025. Undesirable but necessary 10% increase Despite the issue's social sensitivity, Kamal believes price adjustments have become unavoidable. "I believe there will be an increase in prices by about 10 percent; although socially undesirable, it has become economically necessary," he stressed. According to Kamal, the local prices of retail fuel products do not reflect their actual cost. "The fair price is about 75 cents. It is sold locally at an average of 35 cents, while the global price ranges between $1.50 and $1.75. The gap is large, and the state cannot continue to bear it," he stated. The FX rate pressures the import cost Hisham Hamdi, a financial analyst, told Ahram Online that developments in the exchange rate have significantly increased the cost of importing fuel. Thus, the government is compelled to review prices. "The exchange rate rose by about 55 percent in March 2024, leading to a significant increase in the cost of importing fuel, and the state absorbed this cost for a period, but it is natural for them to start passing it on gradually to the final consumer," he added. Despite global oil prices stabilizing at levels lower than expected in Egypt's budget, continued high local consumption is putting increasing pressure on the government to gradually reduce subsidies. In the FY2024/2025 budget, fuel subsidy allocations amounted to EGP 154.5 billion, one of the highest levels in recent years. The government aims to reduce this figure by reviewing domestic prices and aligning them with actual costs. Hamdi estimated the expected savings from price hikes during the current fiscal year to be around EGP 72 billion, with two additional increases possible before the end of June. New wave of inflation? Fuel price hikes are not being applied in isolation. As Kamal noted, diesel, in particular, is the most sensitive product in this equation due to its direct impact on public transport, trucks, services, and food prices. "Raising the price of diesel leads to an immediate increase in transportation costs, and thus everything rises. Therefore, the state is working on introducing alternatives such as high-speed trains, monorails, and periodic buses as effective transportation solutions to reduce reliance on diesel," said Kamal. Hamdi also confirmed that price hikes will reflect on inflation rates but stressed that gradual implementation could ease the impact. "It is natural for this move to lead to higher production costs and prices, but gradual adjustments and the activation of social protection tools can reduce the inflationary shock and give markets time to adjust," said Hamdi. Inflation rates in Egypt have remained on a downward trend over the past four months, dropping to 12.8 percent for the annual headline inflation rate and 10 percent for the core rate. Moreover, Tharwat Ragheb, a professor of Petroleum Engineering and Energy with extensive experience working with global oil and gas companies, told Ahram Online that Egypt still sells retail fuel products at prices much lower than their actual costs. "Diesel is sold for EGP 13.75 per litre, while its cost is EGP 20 per litre, meaning the state bears a subsidy of more than 45 percent,' Ragheb explained. "80-octane gasoline is sold for EGP 13.75 per litre despite its actual cost being EGP 16 per litre, while 92-octane gasoline is sold for EGP 15.75 per litre despite its cost being close to EGP 19. The numbers reveal a huge gap,' he added. The most sensitive product Diesel is the bottleneck in the subsidy equation in Egypt as it is the main fuel for public transportation and freight trucks. Therefore, any increase in its price directly impacts the cost of living. "About 70 percent of transportation in Egypt runs on diesel, and any increase in its price leads to higher production, transportation, and distribution costs. This is why the concerned bodies in the country handle it very carefully," Ragheb explained. Meanwhile, 95-octane gasoline is an easier option for price adjustments due to its use by higher-income groups. "95-octane gasoline is used in higher-income vehicles, and its price liberalization will not significantly impact inflation. Therefore, the government tends to raise it at a faster rate than other types," said Ragheb. The shift from product-based subsidies to in-cash support for beneficiaries has become a strategic direction for Egypt as part of a broader plan to restructure the subsidy system and ensure equitable distribution. Hamdi pointed out that undeserving groups used to benefit from diesel subsidies, leading to the shift towards redirecting the savings into social protection programmes. "The goal is to direct support to those most in need, such as beneficiaries of Takaful and Karama (social assistance programmes), rather than depleting resources on a broader scale that does not achieve social justice," he said. Furthermore, he noted that about 70 percen of total fuel subsidies go toward supporting diesel, making it the most important element in the subsidy equation, especially with an annual consumption estimated at 18 billion litres. Experts agree that sudden price hikes could disrupt the market, so the government prefers implementing increases in phases. "A single large increase could cause a shock, so the government is working on dividing it into two or three phases, allowing it to be absorbed gradually without economic disturbances," according to Hamdi. Butane gas cylinders vs most needy segments Ragheb confirmed that butane gas cylinders are still heavily subsidized, and it would be difficult to liberalize their price suddenly, as a large segment of citizens, especially in rural areas, rely on them. "The cost of a cylinder ranges between EGP 325 and EGP 350, but it is sold to citizens at a subsidized price, with the state bearing more than EGP 150," Ragheb said. Despite Egypt's commitment to its agreement with the IMF to liberalize energy prices by the end of 2025, Kamal believed that full implementation would be rare. "No country in the world has adhered to the IMF or World Bank's recommendations to the letter. The IMF understands this and gives each country room to manoeuvre based on its circumstances," he clarified. Full fuel price liberalization? The government seems to be moving towards implementing at least two fuel price hikes during 2025, the first in April and the second at the end of the year, under close monitoring by both markets and the international community. "Full price liberalization before the end of 2025 seems to be on the horizon, but with Egyptian conditions that suit the economic and social reality," concluded Ragheb. Between a sharp gap in prices and costs, accumulated financial pressures, and strict international recommendations, Egypt faces a difficult but necessary choice. Fuel price hikes are no longer a deferred option but an essential tool for controlling public spending as long as they do not harm the most vulnerable groups. As the April meeting approaches, the most important question remains: will the government succeed in passing the decision without igniting prices? Follow us on: Facebook Instagram Whatsapp Short link:
Al-Ahram Weekly
28-02-2025
- Business
- Al-Ahram Weekly
Tightening the deficit on gas - Economy - Al-Ahram Weekly
Steps are being taken to bridge the gap in gas production The streak of bad news on Egypt's natural-gas production has been broken, following three years of a decline in production, under-met demand, and increased imports, with officials now speaking of the possibility of Egypt regaining its status as a net gas exporter by 2027. Developments over the past six weeks have been particularly promising, with Egypt agreeing last week with Cyprus to receive gas from its largest fields, the Cronos, off Cyprus's southwest coast, and the Aphrodite, to the southeast. The gas will be transported by pipeline to Egyptian waters and then transferred to Egyptian liquefaction facilities at Idku and Damietta before being re-exported as liquified natural gas (LNG) to Europe. The deal is advantageous to Egypt as it will have the Right Of First Refusal (ROFR), allowing it to decide whether to purchase gas liquefied in local plants or sell it on, according to Osama Kamal, a former Oil Minister. 'Egypt can use this gas to cover part of the deficit in local supply. More importantly, the gas transferred through the pipelines is less expensive than importing LNG and then changing it back to the gaseous state to pump it into the local network. Moreover, Egypt will be getting a fee for liquefying and then exporting the gas to Europe,' Kamal noted. However, this will not happen immediately, as while discoveries have been announced by Cyprus since 2013 they have lacked the needed infrastructure to transfer and sell it, he added. 'There was a breakthrough when Cyprus agreed with Chevron to undertake the development process and link its fields with our network very close to the Zohr Field, from where we would transfer it to liquefaction units in Damietta and Idku,' he said. The problem has been that the costly process of developing these fields might take six months or even 18 months, depending on development plans, which are still unclear, Kamal said. The government has plans to cover domestic needs for gas until then. The Cyprus deal came a few weeks after the resumption of drilling in the Zohr Field. In October, Petroleum Minister Karim Badawi said the government planned to increase production at the field by 220 million cubic feet per day (cf/d) through drilling new wells. Starting operations in 2017, the Zohr Field was the main reason Egypt became a net exporter of gas, with production peaking at 2.8 billion cf/d in the third quarter of 2021. However, technical problems related to water filtration as well as a stop in drilling activities due to delays in paying arrears to Eni, the field's developer, led to a decline in production to below two billion cf/d in the first half of 2024. A report by the Middle East Economic Survey (MEES) pointed out that Egypt's gas production dropped to an eight-year low in 2024 to reach 4.87 billion cf/d. The output of the offshore Mediterranean fields, where the Zohr and other smaller fields are located, dipped by 18 per cent through the year to reach 3.54 billion cf/d, its lowest in six years. In addition to plans to increase imports, the government is now giving foreign explorers incentives to encourage them to increase production. This includes paying arrears, with the government paying $1 billion of arrears in January after setting a schedule to repay all the $6.5 billion accumulated dues up until June 2025. It also includes increasing production-sharing ratios with foreign companies in exchange for new investments as well as giving them the green light to export some of their production. Exploration contracts in Egypt give foreign partners 25 to 30 per cent of a field's production. The government also uses the right to buy gas from them rather than let them export it. The delay in paying its dues has accumulated, with the arrears pushing some foreign companies to slow down the exploration processes, leading to last year's energy crunch. Egypt is also pursuing the possibility of increasing its imports of gas from Israel by 58 per cent during the summer months, according to an unnamed government official quoted by Asharq Business. If agreed upon, this will mean Egypt will import 1.5 billion cubic feet of Israeli gas per day. 'As in the case of the Cypriot gas, this is a good bargain, as this is piped gas which is much cheaper than the imported LNG alternative,' the official said. He explained that the price of the piped gas was $4 for each Mobile Treatment Unit (mtu). Importing gas in the LNG form would add an extra $4 to $5 per mtu, representing the cost of the liquefaction, transport, insurance, and regasification, making the overall cost around $9 per mtu. Egypt started to import Israeli gas in 2020. The original plan was to receive the gas through a pipeline, liquefy it, and export it to Europe. However, with the drop in local production, Egypt started to depend on Israeli gas to cover increased domestic demand. The flow of gas was suspended for a while shortly after the fighting escalated with Hamas in Gaza, an incident that raises fears about the future of these supplies in case bilateral relations turn sour in the future. Kamal said Egypt was well prepared for such a scenario. All Egypt's power stations use dual fuel technology, which enables them to switch from one form of fuel to another. This means that the stations can switch from gas to Mazut seamlessly during operations without loss of power, he said. Over and above the power-generation sector, the largest consumer of gas locally, the government has also introduced plans to control the waste and theft of electricity. Kamal said that before these plans were implemented, the theft and waste of electricity resulted in losing 25 to 38 per cent of generated power. The amount of generated electricity per day hovers around an average of 36 Gigawatts (GW), which means that around eight to nine GW were being wasted. 'Cutting these losses means that the demand for gas and thus gas imports will be reduced,' Kamal noted. Expected additions to the energy produced in Egypt during the coming years will make it less vulnerable to any disruptions in imported gas. There are new agreements for the production of solar and wind energy that will lead to the addition of five to six GW to the national grid starting in June. In addition, Egypt's first-ever nuclear-generated power from the Al-Dabaa Plant will enter the grid in 2027-2028, with another five GW being added to the national network. 'The strategy to increase the renewables share in the energy mix to 42 per cent by 2030 or 2035 will lead to balancing the energy demand and supply forces,' Kamal said. In parallel, Egypt is trying to secure more LNG imports. According to the CNN Business Arabic Website, the government will launch a tender for LNG shipments to meet heightened summer demand. This comes after finalising agreements totalling $3 billion in December to purchase 60 LNG shipments in 2025. The increase in LNG imports has necessitated Egypt's renting more floating regasification units, making the total number of units rented reach four or five, according to different sources. * A version of this article appears in print in the 27 February, 2025 edition of Al-Ahram Weekly Follow us on: Facebook Instagram Whatsapp Short link:
