The Egyptian government recognizes a new increase in electricity prices

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Mohammed ShakerSource image
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The Egyptian Economy Minister Mohamed Shaker. Archive photo.

The Egyptian government has announced a new increase in electricity prices, an average of 15 percent, to be implemented starting July 1st.

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

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

"There are still two years in which electricity prices will rise, before the subsidies are finally canceled," said the electricity minister Mohammad Shaker on Tuesday at the ministry headquarters.

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

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

The increases in household electricity use range from 3% to 651-1000 kWh per month and 38.8% for the chip from zero to 200 kilowatts, one of the most used segments in Egyptian families.

The last increase in fuel prices was about a year ago, with variable rates, and exceeded 50 percent in 80 octane gasoline, in addition to diesel (diesel), the two most used in Egypt.

The recent increase in electricity prices has led to a positive change in the pattern of household consumption, which fell to 42% of total electricity consumption in Egypt, the minister said.

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

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