Egypt announces higher electricity prices
CAIRO - Egypt is further cutting electricity subsidies, raising average prices by around a quarter, Electricity Minister Mohammed Shaker announced Tuesday, as it moves forward in a sweeping economic reform programme.
The subsidy cuts are the latest step in an electricity prices restructuring plan launched in 2014, with the new prices taking effect from July 1.
They were decided "taking into serious account the low-income (Egyptians)", Shaker told reporters in Cairo.
The lowest consumers of electricity will have their subsidies cut the least, while the higher the consumption, the larger the cuts, Shaker said.
"Up to 1,000 kilowatt (per month), there is a subsidy," while the subsidy would be abolished for higher usage.
Prices for domestic consumers will rise by an average 24.8 percent, while factories will see their electricity bills rise by almost 42 percent, he said.
The average increase for all users will not exceed 26.6 percent, he said.
The government has said its electricity subsidies will be phased out completely by the end of the 2021-2022 fiscal year. The cut in subsidies are part of a reform programme that prompted the International Monetary Fund to approve a three-year, $12-billion loan in November 2016.
The IMF has praised Egypt's tough fiscal reforms, which included a currency float in late 2016. The Egyptian pound lost half its value after the float, reducing many Egyptians' spending power.
Authorities have since also cut fuel subsidies and adopted a value added tax, measures which have also led to soaring consumer prices. Officials have repeatedly said another reduction in fuel subsidies is in the pipeline.
Last month, authorities increased the price of metro tickets, leading to protests at metro stations during which security forces detained around 30 people.
Economists see some grounds for hope in reviving the economy, which was hit by years of unrest that followed a 2011 popular uprising.
Egypt's GDP growth for the third quarter of the 2017-2018 fiscal year rose to 5.4 percent from 4.3 percent in the same period a year earlier, the planning ministry said last month.