The Madboully government could push back the electricity prices hike planned for this summer, two government sources told EnterpriseAM. They explained that the decline in global oil prices, a more stable EGP-USD exchange rate, and the Egyptian General Petroleum Corporation and the Egyptian Natural Gas Holding Company going after long-term contracts provide the grounds to push the anticipated price hike back.

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We had marked our calendars for July: A government source told us in March that electricity prices hikes for both residential and industrial sectors are set to take effect by July.

ICYMI- Last year’s July hike was postponed, with the government waiting until the electricity crisis at the time got resolved. The Electricity Ministry raised electricity prices by 14-40% between August and September.

Are we in for a summer without blackouts? The dreaded rolling blackouts will not be back this summer, the two sources said, adding that the government has been working to prepare power stations to accommodate the anticipated uptick in demand. That being said, heightened demand may result in a dip in efficiency in some stations. The electricity and oil ministries are working together to ensure power plants can accommodate the increased demand during the hot summer months, one of our sources said. The two sides will also integrate new renewable energy capacities into the national grid to enhance efficiency and lower costs.

Renewables are slowly entering the playing field: While gas-reliant power plants continue to produce the largest percentage (over 60%) of the electricity consumed, the increasing number of solar stations will help gradually reduce dependence on gas, one source said.

Electricity spending is going up next FY: The Finance Ministry has allocated EGP 75 bn in electricity subsidies spending for the fiscal year 2025-2026.

REMEMBER- The cost of electricity production soared after the float of the EGP last year, becoming more of a burden on the state budget, especially after a dip in domestic natural gas production pushed the country from being a net exporter to a net importer of LNG last year. The electricity sector consumes EGP 18 bn worth of fuel each month, the source added.

The IMF is watching: Adjusting energy prices is part of the structural reforms mandated by the International Monetary Fund under our USD 8 bn loan program in a bid to “create space for more productive spending.

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