Rationalizing subsidies benefits Egyptians: PM Madbouly

Ahram Online , Wednesday 3 Jan 2024

Prime Minister Mostafa Madbouly said during a press conference on Wednesday that the government’s subsidy rationalization programme aims to benefit the average Egyptian and mitigate budgetary burdens

Mostafa Madbouly
Egyptian Prime Minister Mostafa Madbouly.


Madbouly made his remarks while addressing the rise in the price of certain goods and services over the past week.

Last week, Egyptian telecommunications companies raised prices for mobile recharge cards and select prepaid plans by 10-15 percent.

On Monday, the Cairo Metro raised ticket prices by up to 20 percent.

On Tuesday, the Ministry of Electricity and Renewable Energy announced a 7-20 percent increase in electricity prices for residential and commercial use. On the same day, Telecom Egypt announced an increase in the prices of its landline internet plans by over 30 percent.

The prime minister emphasized that since the country’s economic reform programme began 2015-2016, experts have consistently argued that the government must streamline its expenses to mitigate significant budgetary burdens.

"When we started the economic reform in this period, there was a focus on rationalizing subsidies,” Madbouly said, clarifying that this did not mean stopping subsidies, but targeting them so they only reach the intended recipients.

“This is what we have done regarding petroleum products, and we implemented a programme to structure the tariff for electricity, water, and gas consumption,” he said.

The prime minister clarified that the government aims for reciprocal support within each sector, meaning that after a certain period, the sector should not have to operate at a loss for the state, as in the case of the electricity sector.

He said that the increase in electricity prices aims to decrease the sector's losses from EGP 90 billion to 75 billion emphasizing that "the fuel utilized in electricity plants is procured in US dollars."

Addressing the metro fare increase, the premiere pointed out that this was the first increase in three years, adding that the increase is needed to cover operation and maintenance costs.

Madbouly also disclosed that Egypt's annual diesel consumption stands at 18 billion litres, with the state providing a subsidy of EGP 5 per litre, costing the state EGP 90 billion annually.

He also pointed out that the state allocates EGP 35 billion per year for butane cylinder subsidies.

Furthermore, the prime minister underscored the escalating burden of bread subsidies, pointing out that the state spends EGP 91 billion on bread subsidies annually.

During the press conference, the prime minister also said that the Egyptian economy is set to fully recover from its current crisis in 2025.

The government is planning to reduce inflation to below 10 percent in 2025, he stated.

Short link: