Temporary relief: Electricity price hike deferred for six months

Ahmed Morsy , Saturday 26 Aug 2023

Postponing any increase in electricity prices for six months has been welcomed by citizens struggling to make ends meet.



Sherine, a middle-income employee in her 40s, felt nothing but relief when she heard the annual increase in power prices, expected to take place in July, would be postponed till January 2024.

“My electricity bill for June was LE1,300. Then, at the beginning of this week, I received July’s bill and it was LE1,960,” she said. “Had the government upped the rate as planned, I wouldn’t have been able to pay.”

Sherine blamed her above average bills on the increased use of ACs and electric fans by her family due to the exceptionally hot weather.

According to a cabinet statement, the decision to postpone the tariff hike came |in accordance with President Abdel-Fattah Al-Sisi’s directives which focus on social welfare and citizen s’ wellbeing during the current economic conditions and challenges.”

Earlier this month, the Central Agency for Public Mobilisation and Statistics (CAPMAS) reported that Egypt’s headline annual inflation had continued to rise in July to hit a record 36.2 per cent, up from 14.6 per cent recorded on the same month last year.

Prices of grains and bread rose 55.7 per cent, meat and poultry by 93.4 per cent, seafood category by 83.4 per cent, and dairy, cheese, and eggs by 64.7 per cent.

On Saturday, President Al-Sisi acknowledged the hardship caused by rising prices and said the government is actively working on measures to alleviate the impact of inflation.

“Amid the ongoing rising prices of commodities, it feels good not to face a rise in electricity prices,” said Nader, a recently married man in his late 20s.

Nader, who does not have an AC unit, said his electricity bill for July was LE480. While the short-term relief was welcome, Nader is worried that come January his bills will rise by 20 per cent.

Household electricity bills were set to rise by as much as 21 per cent, according to the six-year plan the government revealed in 2014 to phase out electricity subsidies by 2025.

In 2021, the last increase, electricity prices rose by between 8.5 and 26 per cent depending on the consumption bracket. Under the delayed increase, consumers using up to 50 kw a month will pay LE0.58 per kw come January, compared to LE0.48 now.

Those using between 51 to 100 kw will pay LE0.68 compared to LE0.58. Consumers of between 100 and 200 kw will see unit prices increase from LE0.77 to LE0.83, while those using between 201 and 350 kw a month will see the unit price increase from LE1.06 to LE1.11. The two highest consumption brackets will not be affected by January increases as they already pay the whole cost of the electricity they consume.

A source from the Electricity Ministry told Youm7 news website that postponing the price increases will cost the government more than LE12 billion.

While Egypt has built a number of power stations in the last six years, increasing electricity production, leading to a theoretical surplus, since the beginning of the heat wave in mid-July daily consumption of electricity has surged. In response, the government has been implementing temporary load reductions on the natural gas which feeds power plants, resulting in one to two hours of daily power cuts across the country.

“Without the recent electricity projects, we would have had power for only three hours a day,” said Prime Minister Mustafa Madbouli. He said cuts of “one or two hours” may last until the second or third week of September.

The prime minister has urged measures to conserve power, including reducing lighting in streets and government buildings.

Government employees who do not provide direct services to the public will work from home each Sunday during August, and the Ministry of Youth and Sports has been told to ensure football matches take place before sunset to reduce electricity consumption at sports facilities.

* A version of this article appears in print in the 24 August, 2023 edition of Al-Ahram Weekly under headline of "Temporary relief"

Short link: