ELECTRICITY in Egyptian households will increase by 19 per cent on average starting July, Minister of Electricity Mohamed Shaker said on Tuesday. Five out of Egypt's seven electrical consumption tiers divided according to the volume of power consumed in kilowatts will increase in price. Average electricity prices increased by 15 per cent in July 2019 and by 26 per cent in 2018. The highest increase would be 30 per cent for those in the third tier with consumption of more than 200 kilowatt hours per month, reaching LE0.65 per watt. While the fourth and the fifth tiers would be levied at 14 per cent and 16 per cent more respectively, the sixth and seventh tiers are consumers in the highest consumption brackets and are fixed at LE1.4 and LE1.45. In 2015 Egypt embarked on a five-year phase-out programme for electricity tariffs that should have concluded last year but was postponed by the government until 2022. On Tuesday, Shaker said the government extended the plan for three more years so that subsidies will be fully lifted in fiscal year 2024-25. The decision would lighten the burden on households stretched by the coronavirus. State subsidies for the sector for the three additional years would cost LE27.8 billion, according to Shaker. Meanwhile, tariffs for industry would be reduced by 10 piasters per watt, a move that would cost the Ministry of Finance LE22 billion in subsidies. Several MPs and industrialists have been calling on the government to lower the cost of what manufacturers pay, arguing that high electricity costs are damaging local industry and holding back production.
*A version of this article appears in print in the 11 June, 2020 edition of Al-Ahram Weekly
