HomeNewsEgypt: tariff subsidies to lift over a three year period

Egypt: tariff subsidies to lift over a three year period

The Egyptian Ministry of Electricity is preparing an implementation plan for the electricity increase set to come into effect in July.

This is according to a ministerial source, who explained that the original plan was to lift electricity subsidies completely in July 2018; however, President Abdel Fatah al-Sisi has directed the government to phase out subsidies throughout three years.

This according to the source is to alleviate burdens on people, Egypt Today reported.

Economic reform programme

According to media, the decision to lift subsidies forms part of the north African country’s  economic reform programme, which started in 2014 and included cutting subsidies and imposing new taxes.

It is also part of a three-year $12 billion International Monetary Fund (IMF) loan agreement, which Egypt clinched in 2016.

Last year, consumers faced an increase between 18-42% depending on the category and level of their consumption.

Egypt Today noted that the phasing out of subsidies will continue to take place every year until they are completely eliminated by the end of fiscal year 2021/22.

Media added that household sector consumption represents 47% of the total energy distribution, while factories consume 24%.

The adjusted billing structure has incorporated a new fee to accommodate the energy efficiency service.

Ministry of Electricity sources told Daily News Egypt that the expected revenue from energy efficiency fees in the next fiscal year amounts to EGP 168.9 million ($9 million), which will then increase to EGP 176.5 million ($10 million) in FY 2019/2020, then to EGP 184.4 million ($10.3 million) in FY 2020/2021, media reported. Read more…


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Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.