Minister of Electricity Mohamed Shaker announced on Tuesday an increase in electricity prices effective July 1st.
Shaker stated the price increase is vital to ensure the continuation of the services, “If we do not increase current prices then electricity subsides would reach 69 billion Egyptian pounds.”
He added that despite these increase in prices, the government has been subsidizing electricity more than ever, explaining that the subsidies have increased 26.6 percent. The minister also said that is a good deal compared to the recent price increase in natural gas, adding that Egypt has managed to buy gas at lower than world prices, “We buy natural gas to produce the Egypt’s electricity for $3 per 1 million MMBTU, the real price is $4.5.”
Shaker said that factories play a major role in the increase of electricity due to high consumption, as factories are responsible for 41 percent of electricity quota.
Consumers get a fair deal according to Shaker, since the country subsidizes most of the electricity cost.
“What consumers pay for 50 KW of electricity does not exceed 18 percent from the cost of electricity. 100 kw costs LE 123 to generate, consumers pay between LE 28 and LE 95,” he explained.
Shaker also added that the price increase will be proportionate to consumption rates, as consumption rates reflect on the general financial capabilities of the consumers, therefore it is a fair rate increase, “The more consumed, the higher percentage is paid while those who consume less come from a lower financial capability, so they won’t pay as much.”
The minister said that there will not be any subsides for those consuming more than 1000 kilowatt per month, and that those people will pay more than the electricity price to cover the subsides.
Finally, he announced that high-voltage consuming factories will face a 41.8 percent increase in electricity prices.
Last year witnessed a LE 30-billion-government subsidy for electricity and the kilowatt cost was 95 cents.
The tariff increase comes as part of a structural adjustment program with the International Monetary Fund (IMF). The program aims to liberalize markets and restructure the state budget.
The new prices are as follows:
First bracket: From 0 to 50 kilowatts = (22 piasters up from 13).
Second bracket: From 51 kilowatts to 100 = (30 piasters up from 22).
Third bracket: From 0 to 200 kilowatts = (36 piasters up from 27).
Fourth bracket: From 201 to 350 kilowatts = (70 piasters up from 55).
Fifth bracket: From 351 kilowatts to 650 = (90 piasters up from 75).
Sixth bracket: From 651 to 1000 kilowatts = (135 piasters up from 125).
Seventh bracket: From 0 to more than 1000 kilowatts = (145 piasters up from 135).
From 0 to 100 kilowatts = (55 piasters up from 45).
From 0 to 250 kilowatts = (100 piasters up from 84).
From 601 to 1000 kilowatts = (115 up from of 135).
From 0 to over 1000 kilowatts = (150 piasters up from 140).