Egypt’s Ministry of Electricity stated putting a plan for the imminent increase in electricity prices, slated for July 2018, a source at the ministry said Sunday.
The minister Mohamed Shaker said that the original plan was to lift electricity subsidies completely in July 2018, but President Abdel Fatah al-Sisi has directed the government to phase out subsidies throughout three years to alleviate burdens on people.
The state is spending 52 billion Egyptian pounds a year on electricity subsidies, the source said, adding that the new increases will be “suitable” in comparison with Egyptians’ wages.
Slashing subsidies comes as part of Egypt’s economic reform programme, which started in 2014 and included cutting subsidies and imposing new taxes.
It is also part of a three-year $12 billion International Monetary Fund (IMF) loan agreement, which Egypt clinched in 2016.
Electricity prices went up last year, with price increases ranging between 15-36 percent depending on the consumption bracket.
Phasing out subsidies will continue to take place every year until they are completely eliminated by the end of financial year 2021/2022.
Egypt spent 64 billion pounds on electricity subsidies during the 2016/17 fiscal year which ended in June, more than the 30 billion pounds initially expected in the budget.
Household sector consumption represents 47 percent of the total energy distribution, while factories consume 24 percent.
Source: Egypt today