First price hike on water bills for Egyptian households in nearly a decade

Ahram Online, Thursday 1 May 2014

Increases on higher-consuming households is part of wider plan by Egypt's government to reduce subsidies, expected to exceed LE130 billion this fiscal year

A young girl looking at flowing tap water in Egypt. (Photo by Reuters)

Egyptian households will see the implementation of the first price increase for potable water in eight years this June, Mohie Eddin El-Serafy, spokesman for the Holding Company for Water and Waste Water (HCWW), told Ahram Online on Thursday.

According to El-Serafy, the decision to hike prices on drinking water by LE0.01 per cubic metre was taken six months ago under the previous cabinet led by then-prime minister Hazem El-Beblawi, but it came into effect this month regarding the higher-spending segments of HCWW’s 10 million subscribers nationwide.

The new tariffs will be imposed on subscribers who consume more than 10 cubic meters of water per month, with the new price between LE0.36 ($0.05) and LE0.67 ($0.10) per cubic metre.

“We won’t touch the low-income and poor families who are included in the first tranche of consumption, along with 60 percent of subscribers,” El-Serafy told Ahram Online.

In 2006, the government differentiated prices according to consumption, with the lowest segment consisting of those who consume less than 10 cubic metres per month, at a cost of LE0.23 ($0.03) per cubic metre.

From 1998 to 2006, all Egyptians paid the same tariff of LE0.23 per cubic metre, he said.

HCWW produces around 25 million cubic metres per day at an actual cost of LE1.4 ($0.20) per cubic metre, which is more than double the tariff paid by the highest consumption segment.

Government subsidies on drinking water reach LE1.2 billion ($0.17 billion) annually, said El-Serafy.

On the other hand, the price of water for non-home use was raised a year ago to LE2.4 ($0.34) per cubic metre for the industrial sector, LE1.09 ($0.16) per cubic metre for the services sector, LE0.95 ($0.14) per cubic metre for commercial use and around LE1.8 ($0.26) per cubic metre for the touristic sector.

Egypt’s interim government has been trying to figure out how to shrink its subsidy bill, targeted to reach LE166 billion ($23.6 billion) by the end of the current fiscal year 2013/14.

The energy subsidy bill was targeted to be LE20 billion ($2.8 billion) less than the previous fiscal year 2012/13, which stood at LE120 billion ($17.1 billion), but it is still expected to exceed LE130 billion ($18.5 billion), according to the petroleum minister.

In April, the government raised natural gas prices for households from LE0.1 to LE0.4 per cubic metre.

In the same month, an official source told Al-Ahram that the cabinet led by interim Prime Minister Ibrahim Mahlab was considering raising the costs of three widely-used forms of petrol – 92 octane, 80 octane and diesel, all of which would be LE1 ($0.14) higher per litre. 

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