Egypt's electricity ministry announced on Monday the new tariffs for household consumers as a part of the government’s plan to phase out the energy subsidy within five years as of July 2014.
The new tariffs, which were scheduled to be implemented last July, aim to trim the state's subsidies for the electricity sector to reach EGP 4 billion in 2017 and zero in 2018, said minister Mohamed Shaker during a televised press conference held in Cairo.
“The electricity subsidy was estimated at EGP 12 billion in this year’s budget, but we raised it to EGP 30 billion, and without the new prices the subsidy bill would have been inflated to EGP 48 billion,” Shaker said.
Shaker said that the average cost of producing electricity (Kilowatt-hour) has risen from roughly EGP 0.47 in 2014 to EGP 0.64 currently.
The minister attributed the rise to the difference in the official exchange rate and the total investments that were carried out by the ministry since 2014 through 2015 and 2016 at a cost of around EGP 75 billion to add 6,882 extra megawatts to the grid’s capacity through new stations and maintaining existing ones.
The Central Bank of Egypt devalued the local currency by 13.5 percent in March 2016 against the US dollar to reach EGP 8.78 in an attempt to eradicate the black market.
“Since June 2015, we [the ministry] have not reduced even one megawatt from the grid’s loads,” Shaker told reporters.
