It might be time to turn down the AC: The Electricity Ministry has reportedly begun implementing hikes that will see household electricity prices rising by 14-40%, ministry sources told media outlets (here, here, and here). The hikes have reportedly come into effect for those in the highest consumption bracket using prepaid meters — with brackets below this to follow soon — while those billed monthly will see these increases reflected in their bills starting September. This marks the second round of electricity price increases this year, following earlier hikes in January.

We knew this was coming: A ministry source earlier this week told us that the ministry was on track to raise prices by an average of 30% in September following cabinet approval, with higher consumption households set for larger increases and lower consumption households in line for smaller price hikes.

But we’re still yet to hear anything official on the matter: Although unconfirmed reports allege that some of the new tariffs are already being out in place for customers on prepaid meters, there’s so far been radio silence from official channels.

The breakdown: Here’s the new leaked electricity tariffs for households:

  • Tier 1: 0-50 kWh/month will be charged EGP 0.68 per kWh, up 17.2% from EGP 0.58
  • Tier 2: 51-100 kWh/month will be charged EGP 0.78 per kWh, up 14.7% from EGP 0.68
  • Tier 3: 101-200 kWh/month will be charged EGP 0.95 per kWh, up 14.5% from EGP 0.83
  • Tier 4: 201-350 kWh/month will be charged EGP 1.55 per kWh, up 24.0% from EGP 1.25
  • Tier 5: 350-650 kWh/month will be charged EGP 1.95 per kWh, up 39.3% from EGP 1.40
  • Tier 6: 650-1k kWh/month will be charged EGP 2.10 per kWh, up 40% from EGP 1.50
  • Tier 7: Above 1k kWh/month will be charged EGP 2.23 per kWh, up 35.2% from EGP 1.65

The commercial and industrial sectors will also see price hikes, reportedly ranging from 23.5-46% and 21.2-31%, respectively, from the beginning September.

The rationale behind the timing: Earlier this summer, an Electricity Ministry source told us that the government had decided to postpone any hikes to electricity prices to September, pushing back the hikes until it resolves the electricity crisis.

Playing by the IMF’s rulebook: Adjusting energy prices is part of the structural reforms mandated by the International Monetary Fund under our USD 8 bn loan in a bid to “create space for more productive spending,” the Fund said in a statement announcing the completion of the third loan review last month. “Restoring energy prices to their cost recovery levels, including retail fuel prices by December 2025, is essential to supporting the smooth provision of energy to the population and reducing imbalances in the sector,” it said. The government is working on a plan to phase out electricity subsidies over the course of the next four years.

Tags: