Electricity Ministry to recommend power prices rise up to 55% in July; stay tuned for political theatre
Electricity prices set to rise by as much as 55% come July? Speculation about how far electricity prices will rise in July has kicked into overdrive, with ministry sources telling Al Mal that its final recommendation to cabinet is for prices to rise 33-55%. Previous reports had suggested that the new system would divide residential consumers into four consumption tiers — 0-100 KW, 101-200 KW, 201-600 KW, and 601-1000 KW — with expected price increases ranging between 15 and 43%.
Watch for political theatre: The new scheme will see consumers at the lower end of the income / consumption spectrum pay more, too, the ministry source said. We’re taking this as a very standard piece of political theatre: The same source made a point of saying that only cabinet could exempt a group of consumers from a price hike. While it’s possible the state will sock it to low-income consumers, its interests align with those of the IMF / World Bank here in sheltering them from the cuts. We see this as likely setting it up for the Council of Minister to allow tension to build, then deflate the bubble just before (or when) the hikes are announced by declaring the poor (and possibly low-income earners) will be exempt from price hikes. Electricity Minister Mohamed Shaker previously rejected a bid by members of the House of Representatives to commit to no price hikes for the working poor.
Are we also looking at different prices for different times of the day? The Egyptian Electricity Utility and Consumer Protection Agency (Egyptera) reportedly also suggested setting two prices for electricity consumption at different times of the day, the ministry source told the newspaper. The proposal, which would only be applied to those in the uppermost consumption bracket, would set a higher price at peak consumption times. It remains unclear whether this proposal was incorporated into the ministry’s final scheme or scrapped.