The increase in electricity prices has widely affected the industrial and commercial sectors. This in turn will lead to an increase in the price of food commodities as well as production costs for industries with high electricity consumption.
Electricity Minister Mohamed Shaker did not speak about the increase in electricity prices for factories during his press conference on Monday. He only said that the prices have increased across the consumption segments of households. He also said that the subsidies value on the new electricity prices will register EGP 29bn in fiscal year 2016-2017.
Shaker said that the state budget will offer electricity subsidies for low consumption segments only. The industries with high electricity consumption will pay the actual cost of electricity in 2019.
He noted that Egyptian Electric Utility and Consumer Protection Regulatory Agency is responsible for reviewing energy prices. They have made a plan to lift the electricity subsidy on the high consumption segments gradually. The plan would bring the total electricity subsidies to EGP 9bn in 2019, which will be directed to low-income citizens.
Shaker said that the increase in prices comes as a result of the high cost of producing electricity. The cost of producing 1 KW of electricity during the current fiscal year reached about 63.7 piastres. It includes 33.9 piastres for fuel, 17 piastres for production, 6.7 piastres for transport and 6 piastres for distribution.
The minister decided to increase the energy prices for industries with intensive electricity consumption by 21%, where 1 KW will be charged EGP 25, instead of the previous EGP 15. The average price reached about 46.5 piastres per KW instead of 38.4 piastres. The off-peak electricity price reached 42.9 piastres per KW, instead of 35.5 piastres. The price on-peak price reached 64.4 piastres per KW instead of 53.1 piastres .
The price of electricity for industries with intensive consumption increased by 23%, so 1 KW used will be charged EGP 35 instead of the previous EGP 26 in the past year. The average price reached 93.7 piastres per KW, instead of 49 piastres. The off-peak price reached 45.2 piastres per KW, instead of 36.7 piastres, and the on-peak price reached 67.8 piastres per KW, instead of 55 piastres.
These heavy industries include iron, cement, copper, fertiliser, aluminium, and petrochemicals, as well as SUMED company.