Energy sector gets affected by recent price hikes

CAIRO - 3 July 2017: Egyptian government lifted subsidies on both diesel and mazut on Monday, leading to new prices for diesel that reached EGP 4/liter from EGP 2.7/ liter and mazut that reached EGP 3,500 /ton from EGP 2,500/ton.

The old prices were equivalent to that of coal prices previously. Some companies such as ACC management will replace their use of diesel with alternative energy sources such as coal, pet coke, and RDF.

Other companies such as cement companies have increased the price of cement to EGP 800/ ton, rising by EGP 80/ton from older price, as a result of the increase in energy costs and the one percent increase in the Value Added Tax (VAT), according to a released statement by Arabian Cement Company. The increase in energy prices will also cause a decline in exports.

That statement also read that the prices will not increase due to the saturation in Quarter1 in 2017 for cement companies with exception to Misr Cement Qena.

Arabian Cement Company expects substituting diesel with cheaper energy alternatives, increase prices furthermore, and increase GPM by more than 25 percent in the third quarter of 2017.