Madbouly had a lot to say about commodity prices: Prime Minister Moustafa Madbouly held a presser (watch, runtime: 37:28) yesterday following a tour of a number of projects in Alexandria and Beheira, during which he touched on the prices of a number of commodities as well as the state’s plan to end power cuts.

FIRST UP, BREAD-

Could subsidized bread get pricier? The government is looking to cut down on its spending on bread subsidies to bring the selling price closer to the “massive” cost of production, Madbouly said. He explained that the government will continue to subsidize bread.

Remember: The government allocated some EGP 134.2 bn to food commodities for the 2024-2025 fiscal year, EGP 125 bn of which will go towards bread subsidies, Finance Minister Mohamed Maait previously said.

Bread subsidy reforms have been shelved for so many years and last we heard of them was in 2022, when Supply Minister Ali El Moselhy called on MPs to form an ad hoc committee to look into possible changes to the country’s massive bread subsidy program. The government did not raise prices over the past period so as not to “increase the burden on citizens,” who were already suffering from soaring inflation, Madbouly said.

A little reassurance: “There may be a slight movement in the price of subsidized bread in the coming period that will not affect the citizen but will help the government to reduce the burden on the fiscal budget,” cabinet spokesman Mohamed El Homsani told Ala Masouleety (watch, runtime: 21:05).

The beginning of more subsidy cuts: Subsidies for some commodities will be lifted completely, El Homsani added.

It’s about time, says Maait: The state has not touched subsidies over the past four years due to the country’s economic conditions but they have “become a threat to the financial and economic security,” Finance Minister Mohamed Maait told Hadret Al Mowaten (watch, runtime: 33:53).

FUEL PRICE HIKES-

More fuel price hikes ahead? Madbouly signaled that we could see more fuel price hikes as the state looks to “restore balance” between cost of production and end price by the end of 2025. This will happen “gradually” and will not include diesel.

“Subsidizing fuel is against the state’s interests,” Maait said, noting that lifting fuel subsidies will allow the state to re-allocate these funds towards health, education and social protection.

Remember: The government’s fuel pricing committee hiked petrol prices by 8-10% in March and diesel prices by 21.2%. The government has increased fuel subsidies allocations in FY 2024-2025 to EGP 154.5 bn.

Fast-tracking our green transition: Egypt’s green transition has been stymied in recent years due to the high production cost and unavailability of FX needed, Madbouly said. Now with the float of the EGP and availability of hard currency, green projects that have been signed will have two to three to become operational, he continued.

NO POWER CUTS BY YEAR END-

Less spending on electricity subsidies ahead: Electricity Minister Mohamed Shaker will prepare a plan as to how the government can completely cut its spending on electricity subsidies over the coming four years, Madbouly said. Households with light consumption will continue to see their electricity bill heavily subsidized but the government will be able to cover the cost through other outlets.

The Electricity Ministry rang in the new year with price hikes, which saw electricity prices rise by 16-26%.

ICYMI: The Madbouly government in 2020 laid out a roadmap to phase out subsidies by 2025 — pushing back an existing July 2022 deadline that was already an extension of a 2019 deadline penciled in way back in 2014.

AND- The end of power cuts? Madbouly said (watch, runtime: 1:18) he directed the electricity and oil ministers to present scenarios as to how the government can keep the light on 24/7 with the end of daylight saving time, by November or December the latest.

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