Power Ministry to double subsidy bill next fiscal year, considers alternative phase-out scenarios
The Electricity Ministry is reconsidering its five-year plan to phase-out electricity subsidies, as its subsidies budget has nearly doubled as a result of the EGP float and fuel price hikes and is expected to reach EGP 63 bn in FY2017-18, a government official tells Al Borsa. Three options are on the table to replace the plan, which would have seen power subsidies cut 50% from their 2014 levels by 2020 and fully eliminated by 2025. The first would see electricity prices rising next July as planned and subsidies scrapped entirely by FY2018-19, while the second would cut subsidies completely starting FY2017-18, except for low-tier consumers. The third scenario would see lower-tier segment continue to receive subsidized power until 2019 while eliminating subsidies for high-tier consumers by FY2017-18. A ministry committee is expected to present a new proposal to the minister in two weeks’ time, before the Ismail cabinet reviews it at the end of January.