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Tuesday, 25 July 2017

Egypt raises electricity prices to trim state subsidy bill

New tariffs should cut the government's energy subsidies by almost 70 percent, says the electricity minister, as Egypt tries to meet growing fuel demands

Bassem Abo Alabass, Thursday 3 Jul 2014
Mohamed Shaker
Egypt's electricity minister Mohamed Shaker (Photo:Ahram)
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Egypt's electricity minister Mohamed Shaker held a press conference on Thursday to announce the new tariffs for both households and commercial sectors, representing a new increase in energy prices.

According to Shaker, the new tariffs, which started this July, aim to trim the state's subsidies for the electricity sector by 67 percent over five years to reach LE9 billion – instead of the LE27.4 billion already allocated in the fiscal year 2014/15.

"Without the new tariffs, the electricity subsidy in the 2014/15 state budget would have recorded LE38 billion," Mohamed El-Yamany, the ministry's spokesman, told Ahram Online.

El-Yamany added that the ministry pays an average price of LE0.47 to produce one kilowatt of energy per hour, while the average selling price registers LE0.22.

"This difference in prices between production and selling has burdened the ministry with LE163 billion in debts to the ministries of finance and petroleum until June 2013," El-Yamany said.

Electricity tariffs didn't change for more than a decade until 2004, when the government announced a plan to raise prices – later halted in 2008 as a result of the international economic crisis.

The new rise per kilowatt/hour (kw/h) will vary from LE0.02 to LE0.07 increasingly.

According to the ministry, the new monthly tariffs for households' brackets will be as following:

- Those (4.2 million subscribers) who consume up to 50 kw/h will pay LE0.07.

- Those (2.6 million subscribers) who consume from 50 to 100 kw/h will pay LE0.14.

- Those (8.2 million subscribers) who consume from 100 to 200 kw/h will pay LE0.16.

- Those (7.7 million subscribers) who consume from 200 to 350 kw/h will pay LE0.24.

- The consumption category between 350 and 650 kw/h will pay LE0.34.

- The consumption category between 650 and 1000 kw/h will pay LE0.60.

- The consumption category of more than 1000 kw/h will pay LE0.74.

The first four brackets represent 57 percent of the total subscribtion to the state's electricity services nationwide. 

Energy consumption is currently peaking at around 22,000 megawatts (Mw) per day, much less than the 34,000 mW used in the hottest months of summer.

Power cuts have become more frequent in Egypt since August 2008, but are mostly limited to the summer. The phenomenon of blackouts in winter first started in December 2012, but intensified this year due to fuel shortages.

According to official figures, electricity recorded more than 55 percent consumption of the country's total natural gas production.

In June, the petroleum ministry's spokesman told Ahram Online that it provides power stations nationwide with around 80 million cubic metres of natural gas, 26,000 tonnes of the low-quality fuel mazut and 1,500 tonnes of diesel per day in an attempt to avoid ongoing regular blackouts.

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7



ashish
05-07-2014 11:03am
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electricity prce increase
thanks
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6



Sam Enslow
05-07-2014 05:57am
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Privitize
The electric company is now not accountabe to anyone. Try to get a job there. You had better have a relative working there or be prepared to pay. Merit means nothing. Also realities of economy must be faced. For too long politicians have hidden market truths from the people. Privitization will encourage investment and improvements in services because management will be accountable to stockholders. New sources of energy can be developed, like solar, by investors, not by borrowing more money. The price must reflect the cost of production. A separate program can be put in place to help the poor pay for electricity.
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Sam Enslow
05-07-2014 04:08pm
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Depends on system
US railroads are private as are telephone and electric companies. The costs of running a RR make passenger travel expensive, but now you have low cost airlines. No system is peerfect, but the private sector can change while politicians protect their political bases.
doland D
05-07-2014 11:18am
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Privatization is not so rosy as you paint it.
Privatization does not encourage breakthrough in science, technology and production. Check some case study's. Here in the UK, the telephone and the railway services were government owned once (which was supposed to mean; owned by the people). As soon as it was privatized it became a money making scheme at the cost of anything else. The railway/transport is in decay with constant hike in prices without improvements. If there is mismanagement currenty the way its run, sort it out. I can see there is corruption at all levels in Egypt, especially in the police, Judiciary being above the law and people itself in Egypt. I do believe strongly in private property ownership as well but not the services everyone uses and needs. It should be owned by the people controlled/managed though them.
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expat
04-07-2014 09:01pm
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all shoe shine....the poor will pay the price of the last 4 years waisted
egypt has not a near to needed industry to supply energy so,what actually is new in this? funny enough,this heroes are waisting diesel and gas to create energy,whilst they are sitting on one of the most powerful solar areas.....ok,they dont have money to invest in the necessary technology,as usual,as the fat goes to the belly,so to speak you guys are doomed and please just stop making excuses to the world,as it is just your own fault to have neglected any chance to reverse it
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Yossef
04-07-2014 04:58pm
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efficiency is important BIS
Actually old mud brick houses in Egypt are more energy savy than the others. Mud brick is indeed a powerful heat insulation. The real problem lies more with urban constructions, with loads of concrete and poor materials not in harmony with Egyptian environment and weather.
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mark
04-07-2014 02:33pm
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efficiency is important
A house in the Uk has external brick-air gap/insulation-then internal bricks-stud work-gypsum. Egyptian house Concrete rebar frame-brick with mahara inside and out. the heat from outside easily transfers from the outside in walls become hot and absorb the cool air from your AC. Standards of new build houses have to be set so private owners don't build houses cheep and inefficient houses not caring because energy is still very cheep.
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doland D
04-07-2014 11:06am
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Nationalise all the essential services
Nationalise all the essential services, tell the rats to get of the gravy train.
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Sam Enslow
05-07-2014 05:48am
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Privitize
The electric company is now government controlled. Try to get a job there. You better have a relative working there or be prepared to
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George Sedqi,Cairo
03-07-2014 10:26pm
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We want the MB back, down with Sisi
I think the revolution against this thug has just begun.
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