In the fight to cut subsidies, the House is proving to be a bigger nuisance than expected: Emboldened by a spike in headline inflation to 29% last month, the House of Representatives has embraced its inner populist and begun ratcheting up pressure on the Ismail government. MPs are trying to dissuade Cabinet from implementing subsidy cuts just as the IMF is coming to inspect progress on the reform agenda before deciding to disburse the second payment of the USD 12 bn facility. The House Energy Committee is asking Electricity Minister Mohamed Shaker to postpone a hike in electricity prices slotted for July 2017 to July 2018, when the country’s economy is expected to improve, committee member El Sayed Hegazy tells Al Borsa. According to Hegazy, Shaker has vowed to look into the committee’s request, but did not clarify when he would issue a decision. As we noted last week, the Electricity Ministry announced it is repricing electricity following the increase in fuel prices as a result of the EGP flotation, but has yet to provide details on the new pricing formula. New price increases were expected anyway as part of the five-year plan to cut subsidies on electricity.

The pressure didn’t stop there as Supply Minister Mohamed Ali El Sheikh promised the House Economics Committee to revisit the price increases on subsidized goods, following a contentious hearing at which MPs skewered the minister on inflation, Al Mal reports. He said he would propose reducing the price of subsidized goods to Prime Minister Sherif Ismail at the next cabinet meeting. El Sheikh went back to his usual tactic of blaming everything wrong with prices on the private sector, telling MPs that “businessmen” were the reason the ministry was “forced” to raise prices. On a related note, El Sheikh told the committee that in addition to the 1.2 mn welfare cheats who were cut from the food subsidies system, 12 mn saw their supply cards suspended for incomplete data. These will be restored once card holders provide their full information, AMAY reports. El Sheikh also said his ministry would make available on an as-needed basis stocks of strategic commodities built-up using a USD 1.8 bn facility from the CBE to cobble together a six-month reserve, Al Borsa reports.