{"id":572071,"date":"2020-06-10T04:04:40","date_gmt":"2020-06-10T04:04:40","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2020\/06\/10\/electricity-prices-to-rise-16-30-july-but-subsidies-are-with-us-until-2025\/"},"modified":"2020-06-10T04:04:40","modified_gmt":"2020-06-10T04:04:40","slug":"electricity-prices-to-rise-16-30-july-but-subsidies-are-with-us-until-2025","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2020\/06\/10\/electricity-prices-to-rise-16-30-july-but-subsidies-are-with-us-until-2025\/","title":{"rendered":"Electricity prices to rise 16-30% July, but subsidies are with us until 2025"},"content":{"rendered":"

<\/a> Your electricity bill will rise by as much as a third in July<\/strong> \u2014 but subsidies won\u2019t be fully <\/strong>lifted for <\/strong>another five years: <\/strong>Average rates for electricity sold to residential consumers will increase between 16-30% from 1 July as the government has fully lifted subsidies on the uppermost consumption bracket. Many businesses, however, won\u2019t be paying more as the tariff charged to retail and other commercial consumers will be left unchanged.<\/p>\n

Factories will also be getting a EGP 0.10\/KWh reduction in their August bills.<\/strong> Factories have been struggling to keep up with rising costs, and have been calling<\/a> for price cuts. Meanwhile, farmers using electricity for irrigation will pay EGP 0.85\/KWh, up from EGP 0.75\/KWh in fiscal year 2019-2020.<\/p>\n

Natural gas prices for electricity plants, meanwhile, remain unchanged.<\/strong> Prime Minister Moustafa Madbouly had decided in March<\/a> to set the price of natgas for electricity plants at USD 3.25 \/ MMBtu, but plants currently pay USD 3 \/ MMBtu and state coffers cover the remaining USD 0.25.<\/p>\n

S<\/strong>ubsidies are also with us until 2025<\/strong>: <\/strong>A plan that would have seen subsidies entirely wiped out by July 2022 is being stretched out: Subsidies will now taper off through July 2025 to help consumers better cope with the impact of the covid-19 pandemic. When the government had first mapped out its planned elimination of electricity subsidies in 2014, the plan had been to lift subsidies entirely in 2019, but extended the timeline under orders from President Abdel Fattah El Sisi. Electricity prices increased by at least 15% in July 2019<\/a>and by an average of 26% in 2018<\/a>.<\/p>\n

Extending the phase-out will cost state coffers EGP 78.6 bn over the next five years<\/strong>, with households in lower consumption tiers benefiting to the tune of EGP 26.7 bn, manufacturers getting benefits of EGP 22 bn, and natural gas fired power plants receiving subsidies worth EGP 29.9 bn.<\/p>\n

Top-down approach to lifting subsidies: <\/strong>Subsidies in July will only be entirely lifted for households consuming more than 650 KWh a month. Households consuming 1,000 or more KWh\/month, which are currently the only band not handed subsidies, will also be used starting July for cross subsidies that benefit those in lower consumption tiers.<\/p>\n

Tap or click\u00a0here (pdf)<\/a> for a review of the administration\u2019s plan<\/strong> to postpone phasing out electricity subsidies, and figures for the coming fiscal years.<\/p>\n

The new pricing structure for household customers:<\/strong><\/p>\n

Consumption tiers (with state subsidies):<\/p>\n