Egypt PM hints at raising price of subsidized bread, orders stop to power cuts by December

Ahram Online , Monday 27 May 2024

Prime Minister Mostafa Madbouly said on Monday that the cost of subsidizing bread had become very large, but insisted the practice would continue.

Egyptian Prime Minister Mostafa Madbouly
Egyptian Prime Minister Mostafa Madbouly

 

Madbouly's remarks came during a press conference following an inspection tour of several industrial, agricultural, residential, and technological projects in the governorates of Beheira and Alexandria.

The prime minister outlined the state's approach to this issue, noting that Egypt produces 100 billion subsidized loaves of bread annually.

Although bread subsidies would continue, there had to be adjustments to reflect the significant increases in costs, he emphasized.

The state sells each loaf for 5 piasters, resulting in total revenue of only EGP 5 billion, he noted.

The last time the price of subsidized bread was raised in Egypt was in 1988. As of 2022, each loaf cost the state 65 piasters to produce.

Furthermore, Madbouly highlighted the government's incentives for local farmers to grow wheat, reducing imports and lessening pressure on foreign currency reserves.

In April, Minister of Supply and Internal Trade Ali Moselhi announced that a higher committee would be formed to monitor the prices of bread in light of changes in flour prices.

Egypt’s total consumption of wheat amounts to around 18 million tons annually, half of which goes to producing subsidized bread.

Power cuts

Madbouly said that he directed the Minister of Electricity and Energy Mohamed Shaker and the Minister of Petroleum and Mineral Resources Tarek El-Molla to develop a plan to stop the load-shedding power cuts no later than November or December.

He noted that this would require resources to obtain sufficient petroleum resources.

The premier also assigned Shaker to prepare a four-year plan to gradually adjust electricity prices, while ensuring subsidies to lower-income households.

However, he emphasized that the state cannot indefinitely sustain the increasing costs of such subsidies.

The load-shedding programme began in July 2023 to alleviate the mounting pressure on the country's gas network, strained by rising temperatures and the use of air conditioners.

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