The Ministry of Electricity expects proceeds from the increase of electricity tariff to amount to EGP 30bn. This increase is sought to be implemented in the current fiscal year 2017/2018, according to government sources.
Sources in the Ministry of Electricity told Daily News Egypt that the subsidy for the electricity sector in the current fiscal year reached EGP 52.7bn, including EGP 47bn for household use and EGP5.7bn for other uses.
In addition to that, the sources stated that the first tranche of consumers (zero to 50 kw/h) will receive subsidy worth EGP 1.8 bn. The number of subscribers in this segment is estimated at 3.6m subscribers. The second tranche (from 51 to 100 kw/h) will receive subsidy worth of EGP 3.1bn. The number of subscribers in this segment are about 3.2m.
Meanwhile, the third tranche of 101 to 200 kW/h is supported by about EGP 12.8bn. The number of subscribers in this segment is 9.2m. The fourth tranche from 201 to 350 kw will received electricity subsidies by the state by EGP 18bn. This will cover the segment’s 8.6m consumers.
The sources also clarified that the fifth tranche consuming electricity of 351 to 650 kw/h is subsidized with EGP 10.1bn. The number of subscribers to this segment is about 3.6m, while the segment from 651 to 1000 kw is supported by EGP 1.2bn.
Nevertheless, the household consumption accounts for 47% of electricity production, while factories eat up about 24.6%. The average cost is about 96 pt/kw. The subsidy period has been extended to cover three years to ease the burden on citizens.
The rate of increase is expected to vary from one segment to another, with a rate of no more than 10% on the first tranche, and up to 12% on the second tranche. The rate of increase on the third tranche is 14%, rising to 17.5% on the fourth, and to increase, depending on consumption, to between 20 and 25%.
The sources also added that the planned increase of the segments of high consumption, industrial and investment activities range between 30 and 40%.
Minister of Electricity, Mohamed Shaker, held a meeting with the members of the House of Representatives two days ago to present the challenges of the ministry and the way to implement the tariff increase. A meeting was also held with the Board of Directors of the Electricity Regulatory Authority (EgyptERA).
Head of the North Cairo Electricity Distribution Company, Nagy Aref, said he had not been directed to apply the new prices so far, adding that if the letter was sent by the minister, it would take less than 24 hours to adjust the value of the tariff to be applied.