Back to the complete issue
Wednesday, 23 May 2018

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.