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The Egyptian government recognizes a new rise in electricity prices



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Mohammed Shaker

Getty Images
Egyptian Electricity Minister Mohamed Shaker. Archive photo.

The Egyptian government has announced a new rise in electricity prices, which is around 15 per cent on average, to be implemented from July 1.

The government has been pursuing a policy of reducing fuel subsidies for three years, coinciding with a share of the International Monetary Fund (IMF) loan totaling $ 12 billion.

Since then, the Egyptian government has raised the price of fuel and electricity several times, most of which came after the decision to liberalize the Egyptian pound exchange rate in November 2016.

"Two more years that electricity prices will increase, before subsidies are canceled from the end," Egyptian Minister Mohammad Shaker said at a news conference on Tuesday at the headquarters of the ministry.

In July 2014, Egypt began a plan to liberalize electricity prices over five years, but this was extended.

The minister added that the main objective of this increase is to reduce electricity subsidies, which depend mainly on gas prices.

The increase in electricity consumption in the home ranges from 3 per cent to 651 to 1,000 kWh per month, and 38.8 per cent for the chips from zero to 200 kilowatts, one from the segments and most used in Egyptian households.

The last rise in fuel prices was about a year ago, with variable rates, and was more than 50 percent in 80 octane gasoline, as well as diesel (diesel), the two most used in Egypt.

The recent rise in electricity prices has led to a positive change in the pattern of household use, which has fallen to 42 per cent of Egypt's total electricity consumption, says the minister.

There are expectations that fuel prices will rise again in Egypt by mid-2019. This is expected to be followed by an increase in the prices of food, transport and communications.

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