The real cost of Egypt’s electricity is split between your bill, the Treasury, and the country’s dollar reserves

You notice electricity most when it disappears. The air conditioner falls silent, the fridge stops humming, and someone heads for the balcony to see whether the rest of the street has gone dark. Keeping those ordinary sounds going has become an expensive job. Behind the switch is a country buying more of its gas from abroad, finding the USDs to pay for it, and sometimes asking suppliers to wait.

Your bill is just a part of the total cost that you can see. Household electricity tariffs rose by an average of 12% at the start of August, with the lowest consumption bracket left unchanged. But the increase captures only a part of the pressure: the country spent USD 6.04 bn on natural gas imports in the first six months of 2026, up 73% from USD 3.5 bn a year earlier, according to a Capmas bulletin obtained by Shorouk News.

Why it matters: Egypt’s gas shortage has become a bill the whole economy carries. The cost is showing up in demand for greenbacks, in state support for the energy sector, and in the prices households and businesses pay. The question here shifts to where the country can afford to let the cost land.

BACKGROUND- Egypt’s gas import bill jumped from roughly USD 560 mn in February to USD 1.65 bn in March, as the conflict disrupted regional supply and pushed Egypt into a far tighter global LNG market. Oil Minister Karim Badawi said in August that an LNG cargo was costing around USD 80 mn after the war, roughly double the USD 40 mn level beforehand. The country has budgeted USD 10.7 bn for gas imports in FY2026/27 — a 26% y-o-y increase.

Fuel consumption costs rose to around USD 6.7 bn during the summer, according to three government sources, who expect the country’s total petroleum products import bill to exceed USD 20.5 bn this year, including natural gas and fuel oil. The figures underline the scale of the pressure on the state to secure energy supplies in a year when electricity consumption reached unprecedented levels.

The USD pressure

The energy bill is adding to an external account already under mounting energy pressure. Egypt’s net oil and gas trade deficit widened from USD 7.6 bn in FY 2023/24 to USD 13.9 bn in FY 2024/25 and an estimated USD 20.1 bn in FY 2025/26, according to the IMF (pdf). Those figures cover the entire oil and gas trade balance rather than LNG alone, but they show how much larger Egypt’s energy-related USD shortfall has become.

So we asked to pay later, and paid for the privilege: During its early days of LNG imports, the government sought to spread the cost over time, requesting up to six months to pay for cargoes, with some payment periods reaching a year, market participants told S&P Global at the time, which estimated that extended payment terms added around USD 0.50 per mmBtu to delivered prices. Deferring payment eases the immediate hit to foreign currency reserves, but leaves the additional premium sitting on Egypt’s books long after the cargo itself has been consumed.

The cargo price is only the start of what Egypt pays: Freight, Suez transit, regasification, and financing all add to the bill, Laury Haytayan, MENA director at the Natural Resource Governance Institute, tells us, making access to foreign currency central to keeping gas and electricity flowing. FX liquidity, reserves, supplier arrears and the wider oil and gas trade balance therefore become part of the energy security equation.

What the Treasury is quietly covering

The same problem runs in the other direction, the EGP: In May, the Finance Ministry settled EGP 166 bn in unpaid fuel and electricity subsidy reimbursements owed to Egyptian General Petroleum Corporation (EGPC), alongside EGP 13.6 bn owed by the electricity and water ministries. Those arrears had constrained EGPC’s ability to pay foreign partners, showing how payment problems inside the domestic energy system feed back into investment and future supply.

Here’s what standing between you and the real price of electricity costs: The Treasury is increasingly closing that gap directly. Electricity subsidy allocations rose from EGP 2.5 bn in FY 2024/25 to EGP 75 bn in FY 2025/26 and EGP 104.2 bn in FY 2026/27. These are budget allocations rather than final expenditure, but the direction is unambiguous: as the cost of supplying power has risen faster than what consumers pay, the state has absorbed more of the difference.

Who ends up paying

The bill is still climbing: “Later this year, the economics may become more difficult as Egypt has increasing exposure to spot prices, possibly forcing them to reduce imports,” JP Lacouture, analyst at Kpler, tells EnterpriseAM. That leaves Egypt with harder questions than how to survive one disrupted summer: how much reliable electricity costs when the gas behind it has to be imported, and how much of that bill the state absorbs versus passes to consumers.

The alternative to expensive LNG may hurt the pockets more: “LNG is expensive, but the alternative is gas and electricity shortages that could cost more to the economy,” Haytayan says. “I believe the government understands the cost and the dependence issue, but right now it is important to maintain the system’s reliability. If LNG imports prevent electricity shortages, they can protect industrial production, employment, exports, tourism, etc. Therefore, emergency LNG procurement can be justified where the alternative is power rationing or major disruption to productive sectors,” she adds.

Even at the new rate, you’re not paying what your electricity costs to make. Households are absorbing more of the cost, though nowhere near all of it. Even after the increase, the government estimated the annual gap between generation costs and household tariffs at around EGP 100 bn — the hike recovered more revenue without coming close to eliminating state support.

Industry is being handed a larger share. The government considered more flexible gas pricing mechanisms across several sectors — including linking fertilizer producers’ gas costs more closely to international fertilizer prices — before introducing a fixed USD 2 per mmBtu increase in May for a number of energy-intensive industries, excluding customers whose contracts already contained pricing formulas. That reduces the imported energy cost absorbed by the state and shifts the pressure onto manufacturers’ margins and competitiveness.

And the tariff you watch isn’t the only one that reaches you. Protecting household tariffs doesn’t protect household budgets. Electricity rates for irrigation, water distribution, and commercial and service subscribers rose 31.4% in May. “Higher energy prices don’t only affect household electricity bills. They feed into food, transport, water, manufacturing, and services. So policymakers need to balance affordability, system reliability, and financial sustainability,” Haytayan notes.