AS OF LAST Thursday, electricity prices in Egypt increased by 18 to 42 per cent for households and 28 to 45 per cent for industrial and commercial establishments. The price rises are part of government plans to remove subsidies on electricity with a view to removing power subsidies altogether. The government has said that the increases will not affect lower-income brackets because they primarily target heavy consumers. The subsidy cuts and associated price rises are part of an International Monetary Fund (IMF)-supported economic reform programme aimed at streamlining government finances. According to the Ministry of Electricity, last year's floatation of the pound caused the cost of power subsidies to rise from LE40 to LE82 billion. The latest price hikes will help the government to reduce that figure to LE52.7 billion in the current fiscal year and LE 43.4 billion in 2018-19. The government had been planning to phase out electricity subsidies over five years to end in the 2018-19 fiscal year. But the minister of electricity said during a press conference this week that this period had been extended to 2021-2022 in order to ease the pressure on those hard hit by the economic reform measures, the depreciation in the value of the pound and high inflation rates. The electricity price hikes come in the wake of hikes in fuel prices by 50 to 100 per cent, which have had significant knock-on effects on a range of other prices.
