Recent electricity price hikes to reduce sector losses to LE 75B: Egypt’s PM

CAIRO – 3 January 2024: Egypt’s Prime Minister Mostafa Madbouli has commented on the recent electricity price hikes implemented by the government, stating that the decision will help decrease sector losses to LE 75 billion, down from LE 90 billion.

The cost of the fuel used for electricity generation is purchased in US dollars, Madbouli said in press remarks, amid the foreign currency shortages and economic pressures faced by Egypt in the past two years.

On Tuesday, the Ministry of Electricity and Renewable Energy announced a 16-26 percent increase in electricity prices, effective from January 2024.

The announcement follows recent decisions by the government to raise Metro prices by LE 1-2 and by Telecom Egypt, the country’s primary telephone company, to raise household internet prices. Mobile companies have also introduced new pricing schemes.

During his press conference, Madbouli emphasized that the Central Bank of Egypt (CBE) is working to combat inflation, holding weekly meetings with the goal of reducing inflation to below 10 percent by 2025.

He added that the government has developed a short-term plan for the next five years to expedite growth and increase revenues.

Additionally, Madbouli addressed the recent price increased for train and metro tickets, the first such increase in the past three years, stating that it aims to cover operation and maintenance costs.

Regarding subsidy programs, Madbouli said Egypt's annual diesel consumption reaches 18 billion liters, with the state subsidizing each liter at LE 5, totaling LE 90 billion per year.

He also mentioned that the state spends LE 35 billion per year on butane cylinder subsidies to cover the annual consumption of 280 million cylinders.

Furthermore, Madbouli highlighted the growing burden of bread subsidies due to unchanged bread prices.

He noted that Egyptian citizens consume 275 million bread loaves per day, equivalent to 100 billion loaves annually, resulting in the state spending LE 91 billion on bread subsidies.