Egypt is raising electricity prices for households by up to 50% as part of its ongoing efforts to gradually eliminate subsidies in line with an agreement with the International Monetary Fund, according to two government sources on Monday.
A source from the electricity ministry revealed that the new rates took effect on Saturday for prepaid meters and will be implemented for regular meters starting October 1, Reuters reported.
The increases range from 14.45% to 50%, according to the source. The latest hike was originally scheduled to take effect earlier in the summer but was postponed due to power shortages driven by high cooling demand.
Since July last year, load shedding linked to falling gas production, rising demand and a shortage of foreign currency has led to scheduled two-hour daily power cuts in most areas.
To maintain grid stability, Prime Minister Mostafa Madbouly cited a need to import about $1.18 billion worth of natural gas and mazut fuel oil to address the ongoing blackouts. The country primarily generates electricity by burning natural gas.
Last month, the petroleum ministry announced that Egypt had received five of the 21 contracted liquefied natural gas (LNG) cargoes, totalling 155,000 cubic meters. Following this, Madbouly declared an end to power cuts for the summer.
As part of an agreement to expand its loan program with the IMF to $8 billion in March, Egypt committed to reducing energy subsidies. However, the country has repeatedly delayed electricity price hikes in recent years due to ongoing economic challenges.
