The Electricity Regulatory Authority (ERA) has raised electricity prices across several services sectors.
Accordingly, the price of electricity provided to the Cairo metro system climbed 18.1 per cent to LE1.89 per kilowatt-hour (kWh), and the price of power used in irrigation rose by 31.4 per cent to LE2.55. The water companies are to be charged 31.4 per cent more reaching LE2.55, and the commercial and services sector saw the same 31.4 per cent jump to LE2.55.
Amr Elalfy, head of equity strategy at Thndr Securities and a former head of research at Prime Holding, suggested that the latest electricity price hikes may be aimed at streamlining the agencies’ consumption and charging them a fairer price.
He explained that the government wants to hold the agencies accountable for their electricity use at its true cost, thereby reducing the subsidies burden on the state budget.
The increases mean higher operating costs for entities such as the metro and the water companies, with the metro in particular already weighed down by accumulated losses. Final accounts for the 2024-2025 budget show the National Authority for Tunnels posting a loss of LE69.3 million, on top of LE3.6 billion in carried losses from previous years.
Elalfy noted that higher electricity tariffs could eventually translate into higher ticket prices for passengers, warning that such moves would feed inflation. Metro fares rose at the end of March following the government’s announcement of fuel price increases.
The Ministry of Finance estimates losses among these agencies in the new state budget at around LE96.9 billion, attributing them to the gap between the cost of services and the prices charged to users.
Esraa Ahmed, a macroeconomics analyst at Thndr Securities, noted that the aim of raising electricity prices for the Metro and water companies is to reduce the burden of subsidies on power and fuel, particularly as Egypt is currently undergoing a review of spending by the International Monetary Fund (IMF) mission.
The IMF wants Egypt to scrap state‑set tariffs for certain services and move to a cost‑driven pricing system, and the latest hikes seem to be the government’s reply. Closing the gap between what it costs to generate power and what consumers pay is how officials plan to slash energy subsidies.
The cost of subsidising electricity and fuel has risen in tandem with global oil prices since the outbreak of the Iran‑US war. With efforts to end the conflict stalling, international oil prices have recently settled in a range of $89 to $108 per barrel. At the same time, the dollar has surged, jumping from around LE46 before the war to a historic high of LE54.5 in April and trading above LE53 in the banks.
These factors have driven up the state’s bill for purchasing petroleum products, according to Ahmed.
According to government sources cited by the Al-Asharq news website, Egypt’s fuel import bill is set to climb to nearly $1.2 billion in April following record global oil price increases, marking a 56 per cent jump from around $767 million before the Iran conflict.
Egypt imports about one million tons of petroleum products each month to bridge the supply‑demand gap in the local market. This includes 600,000 tons of diesel, 230,000 tons of petrol, and 170,000 tons of butane.
President Abdel-Fattah Al‑Sisi has noted that Egypt’s annual consumption of petroleum products amounts to roughly LE1 trillion with around 60 per cent directed to power stations.
According to Ahmed, the government is seeking to reduce subsidy costs by bringing sale prices closer to actual costs, having already raised electricity tariffs in April on the commercial sector by between 20 and up to 91 per cent.
These bills will be collected this month. The increases also extended to the highest household consumption brackets, which saw rises ranging from 16 to 28 per cent.
Mohamed Hassan, managing director of Alpha Financial Investments Management, warned that if the metro and water companies fail to absorb the higher electricity costs and instead pass them on to consumers through higher ticket prices or water tariffs, the impact will be negative for inflation.
He noted that raising metro fares will not stop at the metro system itself, as it would also trigger increases in private transport on the same routes and distances.
The transport and communications index accounts for between six and 12 per cent of the basket of services and commodities according to which the inflation rate is calculated.
* A version of this article appears in print in the 21 May, 2026 edition of Al-Ahram Weekly
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