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Sunday, 15 December 2019

Egypt energy subsidies to be cut retroactively

Energy prices to rise for Egypt's heavy industries as government attempts to narrow budget deficit

Ahram Online, Sunday 15 Jul 2012
Energy prices
Fertiliser factories are the first to see subsidies cut (Photo: Reuters)
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Views: 2044

Egypt’s heavy industries will see a rise in subsidised energy prices, backdated to January 2012, the state-run Al-Ahram newspaper reported on Sunday.

Mohamed Shoeib, CEO of the Egyptian Natural Gas Holding Company (EGAS), said natural gas prices will be raised from $3 to $4 per million British thermal units (MBTU) for fertiliser factories, while non-intensive industries such as glass and ceramics will pay between $2.3 and $3 per MBTU.

Energy prices for small industries will remain at $2 per MBTU, according to Shoeib, adding that changing this remaining subsidy would put the petroleum sector in financial trouble.

The government announced in January a plan for a 33 per cent hike in the prices it charges heavy industry for supplies of natural gas and electricity in a bid to narrow its growing budget deficit.

Egypt's government announced in June that it would slash fuel subsidies by 27 per cent in the 2012/13 financial year. The amount spent on fuel subsidies will fall to LE70 billion in 2012/13 from LE95 billion in the last fiscal year, and make up 48 per cent of Egypt's total subsidies bill of LE145.8 billion.

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