A new round of austerity measures will come into effect starting Saturday, 28 March, as the government attempts to contain a ballooning energy bill without triggering a new wave of inflation amid the ongoing US-Israeli-Iranian war, Prime Minister Mostafa Madbouly said during a press conference held ahead of the Eid break (watch, runtime: 37:18).

The measures include earlier closing hours for commercial activity, reduced public lighting, a shutdown of government buildings in the new capital after work hours, and a temporary slowdown in diesel-intensive projects. The government is also studying whether to impose remote working one or two days a week across both the public and private sectors.

Why this matters: The government is attempting to walk a tightrope between fiscal pressure, inflation control, and economic continuity. Instead of passing through higher global energy costs to consumers, it is effectively shifting the adjustment onto operating hours, public consumption, and business activity. That helps shield households in the short term but places immediate pressure on sectors like retail, hospitality, and entertainment that rely heavily on evening demand.

The details

Shops, malls, restaurants, and cafes will close at 9pm on weekdays and 10pm on Thursdays and Fridays. The measures will be applied for one month initially, with a review to follow, the prime minister said.

The state is also cutting back on public-sector energy use. Roadside advertisements will go dark, street lighting will be reduced to “minimum safe levels,” and government buildings in the New Capital will shut down at 6pm, with any additional administrative work to be completed remotely, Madbouly said.

At the same time, the government is delaying or slowing diesel-intensive national projects and freezing or postponing selected budget expenditures to preserve liquidity and manage fuel consumption, a measure that will also be applied for one month initially, with a review to follow, the prime minister noted.

The government is also studying whether to implement remote work one or two days a week, Madbouly said. If implemented, this would mark the second time the government applies partial remote work due to energy pressures, following its rollout on Sundays between August and September 2023 during the peak of the natural gas production shortfall and electricity outages.

But this time, the government is considering extending remote work to include private companies as well. Factories, utilities, transport infrastructure, and healthcare services would be exempt, as the government continues to prioritize uninterrupted production and essential services. We will be watching closely how the government puts into effect and enforces the decision if implemented.

Notably, Madbouly did not signal any return to electricity load-shedding for households at this stage, suggesting the government is still trying to manage the crisis without resorting to direct disruptions to residential power supply.

The government is also holding the line on subsidized bread prices despite rising production costs. Madbouly said the cost of producing a loaf has increased by an additional EGP 0.20-0.25 due to higher fuel costs. With the state producing around 270 mn loaves per day, the fiscal burden is rising sharply. Still, he emphasized that any move affecting bread prices — particularly for low-income citizens — is being postponed for as long as possible.

Maintaining industrial output is the top priority, Madbouly stressed. The government is seeking to ensure the continued availability of goods in the market to avoid supply shortages and price spikes.

The good news: We hold sufficient raw material inventories — in some cases enough for up to a year — reducing immediate concerns about production disruptions, Madbouly confirmed, citing industry associations he met with.

The shock is in the numbers

Egypt’s monthly natural gas import bill has surged from USD 560 mn before the war to USD 1.65 bn for the same volumes today — an increase of roughly USD 1.1 bn per month, Madbouly noted. Crude prices have climbed from USD 69 / bbl before the conflict and USD 93 at the time of the government’s last pricing decisions to USD 108.5 (at the time of the presser), with some projections pointing to USD 150-200 if the conflict escalates further, the prime minister said.

Diesel — the backbone of transport, logistics, and much of the economy — has seen one of the sharpest increases, with import prices rising from USD 665 per ton to USD 1,604 per ton, Madbouly noted. Butane prices have also jumped by more than 30%, he added.

The result: The country’s energy bill has effectively doubled or more, with no clear timeline for normalization. The crisis could last weeks, months, or potentially longer, with some scenarios extending into 2026, the prime minister warns.

This was always the scenario to prepare for: Madbouly had previously warned in October 2024, when direct military confrontations first broke out between Tel Aviv and Tehran, that a full-scale regional war would push Egypt into a “war economy” mode. That scenario is now materializing.

ALSO- The government will announce an increase in the minimum wage alongside the approval of the new state budget, expected before the end of the month. The draft budget will be submitted to the parliament by no later than 31 March, in line with constitutional requirements, Madbouly said during the press conference.

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