Cairo: Egypt on Tuesday hiked electricity prices, the latest in austerity measures introduced as part of the country’s painful economic reforms.
Electricity Minister Mohammad Shaker put the price increases for household use at nearly 21 per cent, depending on consumption.
“The overall hikes do not exceed an average of 26 per cent,” he told a press conference in Cairo, apparently referring to price hikes for commercial activities.
“Price increases are an inevitable process. If we left the current prices unchanged, the state subsidy [on electricity] would rise to 69 billion pounds [Dh14.1 billion],” he added.
The increases will take effect starting July when the fiscal year begins in Egypt, according to the official.
Egypt plans to phase out electricity subsidy by 2022.
The latest increases were expected for weeks when the government unveiled a plan to further cut state subsidies on energy. Under the plan, petrol prices are expected to be hiked after the Eid Al Fitr holiday that starts in Egypt on Friday.
In 2016, Egypt floated its local pound and slashed state fuel subsidy as part of tough economic reforms that the government defended as necessary.
The steps unleashed hikes in prices of different goods and services, but secured the country a $12 billion loan over three years from the IMF.
Over the past days, Egyptian media carried reports about the subsidised prices of fuel products and their actual costs, apparently preparing the public for the planned subsidy cuts.
Last month, the government hiked fares of the Cairo metro by up to 250 per cent, a step that triggered rare protests, which prompted authorities to beef up security inside and outside the subway stations.
President Abdul Fattah Al Sissi has repeatedly said that reforms are necessary to heal the Egyptian economy battered by the unrest that followed the 2011 uprising.
Last week, he admitted that the reforms have been “very harsh” and expressed appreciation to Egyptians for their endurance.
In an attempt to cushion the impact of the latest austerity steps, the parliament last week increased pensions by 15 per cent and approved offering two bonuses to civil servants, effective as of next month.
