Electricity prices set to increase in July
We’re all going to start paying more for electricity come July: The Electricity Ministry is repricing electricity following the increase in fuel prices as a result of the EGP flotation, ministry spokesman Ayman Hamza told Al Shorouk, without providing details on the new pricing formula. The move comes as the Ismail government is under pressure to show the IMF it is making progress on the reforms to which it has committed as conditions of obtaining a USD 12 bn extended fund facility. A delegation from the IMF is in town now as a prelude to the disbursement of the second tranche.
Last February, the ministry had announced an ambitious five-year plan to eliminate power subsidies by 2025, and the IMF staff report released last month on Egypt’s USD 12 bn bailout noted that the Ismail government is committed to completely lifting electricity subsidies over the next five years. The Electricity Ministry last hiked electricity prices in August 2016 for residential and commercial consumption as production costs increased and would have exacerbated the burden of subsidies (which rose to EGP 60 bn following the EGP float in November) if consumer prices were not raised in step.
Meanwhile, citizens who were removed from the smart card subsidy system are (expectedly) outraged and are claiming that their welfare access was unlawfully revoked, Al Shorouk reports. As we noted yesterday, the Supply Ministry purged 1.2 mn welfare cheats from the country’s smart card subsidy system in the first phase of a large clampdown on Kramers.