Govt releases new electricity tariffs, revealing hikes extending to Egypt’s major power users

The government’s first electricity tariff increases in almost two years were officially published last week by the Egyptian Electric Utility and Consumer Protection Regulatory Agency.

The Electricity Ministry had announced the hikes in April, with a tariff sheet leaked to the press and the ministry making a brief announcement to reassure the public that the hikes would not affect the lowest household consumption brackets, who are most vulnerable to price hikes. 

But the table published on May 13 shows hikes more extensive than the government had indicated in April. 

The newly published tariffs show for the first time that while the lowest consumption brackets will not face hikes, the highest energy consumers in the country will, adding to a series of price hikes since the war between the United States and Iran that are putting pressure on key sectors tied to food production that could impact the most vulnerable households indirectly in the future. 

The April data, which four press sources told Mada Masr at the time the government leaked to the media, only included increases for the highest household consumption bracket, users of code-based electricity meters, all commercial brackets and medium and low-voltage subscribers.

But the official tariff list published last week included extra and high-voltage subscribers — categories that account for around half of electricity consumption in the industrial sector and include major facilities such as iron and steel plants, quarries, cement and fertilizer factories.

The hikes also affect utility and railway operators such as the Cairo Metro as well as power distribution companies.

These users are subjected to increases of 15 and 18 percent.

The newly disclosed rates were also applied at the beginning of April, Electricity Ministry spokesperson Mansour Abdel Ghany told Mada Masr. 

Despite implementation in the latest billing cycle, the decision is yet to be published in the Official Gazette, and conflicting information has continued to surround the hikes.

The ministry had said commercial electricity prices rose by an average of around 20 percent. But the increase in the lowest commercial consumption brackets exceeded 90 percent. Overall, the average increase across all commercial brackets stood at 33 percent. 

The hikes extending to the country’s major power consumers are expected to ripple through the domestic economy and deepen pressures on key sectors tied to food production.

Fertilizer manufacturers, Egypt’s most energy-intensive industry, are already pushing to export a larger share of their output to offset other hikes enforced in April. The move will increase the burden on farmers already struggling to procure fertilizers for the summer planting season.

The government had initially planned to roll out electricity price increases in July, at the start of the new fiscal year, a step recommended under a structural reform program with the International Monetary Fund that has been delayed several times. 

The government has otherwise delayed price hikes repeatedly throughout the past two years, amid severe economic turbulence, pitching the step as an effort to  “ease citizens’ hardships” and contain inflation.

But the global energy shock triggered by the US-Israeli war on Iran and Tehran’s retaliatory attacks on the Gulf appears to have accelerated the decision.

In early March, only days after the war began, Prime Minister Mostafa Madbuly met with several ministers to discuss measures aimed at containing the economic fallout on Egypt. One of the options was raising electricity prices, as power generation consumes around 70 percent of Egypt’s costly natural gas supplies.

In announcing the hikes, the Electricity Ministry said “the current severe and unprecedented global crisis in all energy resources due to the ongoing war in the Gulf has necessitated the ministry taking decisions to increase the prices of some commercial and residential electricity consumption brackets starting in April.”

The ministry nevertheless insisted that the “increase does not affect low-consumption household brackets at all.”

The government has since reassured the public that fuel prices will remain unchanged until the end of the year, after hikes as high as 31 percent were introduced across all fuel categories in the wake of the March ministerial meeting.

The post Govt releases new electricity tariffs, revealing hikes extending to Egypt’s major power users first appeared on Mada Masr.

المصدر: Mada Masr