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Thursday, 16 May 2019

Cabinet denies reports suggesting Egypt’s home electricity prices will rise 30-60%

Gov’t (sort of) denies reports suggesting home electricity prices will rise 30-60%: The Madbouly Cabinet denied yesterday domestic press reports that emerged earlier this week quoting Electricity Ministry officials as suggesting that residential electricity prices could increase by 30-60% after the next round of subsidy cuts. The government will enforce the next phase of subsidy cuts at the start of the 2019-2020 fiscal year in July. The denial hedged its bets, saying the officials spoke based on their personal expectations and were not announcing a policy decision. The local press had reported on Monday that the ministry is expected to officially announce the new rates by the end of the month.

Background: Egypt raised its average electricity prices for all tiers of industrial, residential, and commercial consumers by an average of 26% last July as part of the plan to gradually phase out electricity and fuel subsidies. The plan began in FY2015-2016 with the launch of the IMF-sanctioned economic reform program and is now approaching its fifth, and penultimate round. Electricity subsidies were originally due to be fully lifted this coming fiscal year, but the period was extended to FY2020-2021 to avoid placing too much pressure on household budgets.

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