Top 10 things you need to know about the new electricity prices

Egypt has recently implemented a series of changes in its electricity pricing structure, marking the first increase since July 2022. These new electricity prices are expected to have significant implications for both citizens and the economy as a whole. Here are ten things you need to know about these developments:

1. Price Increase: The prices of Egypt's electricity segments have increased, with rates ranging from 16% to 26%. These changes apply to four different segments of electricity consumption.

2. Segment Breakdown: The new pricing segments are as follows:

   • 0 to 50 kilowatts: 58 piasters
   • 51 to 100 kilowatts: 68 piasters
   • 0 to 200 kilowatts: 83 piasters
   • 201 to 350 kilowatts: 125 piasters
   • 351 to 650 kilowatts: 140 piasters
   • 0 to 1000 kilowatts: 150 piasters
   • 0 to over 100 kilowatts: 165 piasters

3. Objective: The increase in electricity prices is aimed at improving the efficiency of energy use while bolstering the financial resources of the electricity sector.

4. Impact on Production: Experts anticipate that the rise in electricity prices may lead to increased production costs for industries, potentially resulting in higher prices for goods and services.

5. Government's Assurance: The Egyptian government has assured citizens that the electricity price hike will remain within reasonable limits. They intend to take measures to assist lower-income citizens in mitigating the effects of the increase.

6. Subsidy Increase: To ensure that the majority of citizens benefit from these changes, the government plans to increase the value of subsidies for electricity. Direct financial assistance will also be provided to low-income individuals.

7. Decreasing Sector Losses: Egypt's Prime Minister, Mostafa Madbouli, has stated that these electricity price hikes are essential to reduce sector losses, which are expected to decrease from LE 90 billion to LE 75 billion.

8. Currency Purchase Impact: The cost of fuel used for electricity generation is primarily purchased in US dollars. This poses challenges due to foreign currency shortages and economic pressures faced by Egypt in recent years.

9. Broader Economic Measures: The government has embarked on a short-term plan for the next five years aimed at expediting economic growth and increasing revenues. They are also focusing on reducing inflation to below 10 percent by 2025 through regular meetings with the Central Bank of Egypt.

10. Subsidy Programs: Madbouli highlighted the significant financial burden of subsidy programs. For example, Egypt spends a substantial amount on diesel, butane cylinder, and bread subsidies, reflecting the government's commitment to providing essential services to its citizens.

In summary, Egypt's recent electricity price hikes are a significant development with implications for both individuals and the country's economy. While they are expected to help reduce sector losses and improve financial resources, the government is also taking steps to ensure that the most vulnerable citizens are not disproportionately affected by these changes. The broader economic measures and subsidy programs underscore the complex challenges Egypt faces in balancing the needs of its citizens with economic sustainability.