Sisi Reforms Hike Egypt’s Electricity Prices

Electricity prices in Egypt have been hiked as the new government embarked on its program of subsidy reforms, according to the country’s electricity minister Mohamed Shaker.

The average price for a kilowatt hour would rise from around 0.23 Egyptian pounds to around 0.51 pounds over a five year period, Shaker told the state news agency on Thursday.

Egypt’s newly elected President Abdel Fattah al-Sisi is facing pressure to slash government spending as he attempts to improve the country’s creditworthiness and reverse years of economic stagnation.

Egypt has been plagued by social and political turmoil since former president Hosni Mubarak was ousted in January 2011. Sisi, a former head of the armed forces, is the country’s third president in four years.

Cairo spent around 144 billion Egyptian pounds ($20bn, £11.7bn, €14.8bn) on energy subsidies in the fiscal year ending on June 30, around a fifth of its overall budget, while electricity is currently sold at less than half its production cost.

Shaker said the reforms to electricity would allow the government to phase out the subsidy altogether in five years.

Meanwhile the country’s Planning Minister Ashraf al-Arabi has warned Egyptians that petroleum products would see price rises shortly.

Speaking on Wednesday, Arabi said the price hikes would come “within days” although he did not give a specific date or amount.

Energy prices in Egypt are among the lowest in the world. Successive administrations have vowed to reduce the size of state subsidies but have recoiled from pushing through major reforms.

Source: International Business Times