Inside one of the electricity companies, Atef Hassan (a pseudonym), 55, stood asking a company employee about a sudden deduction of about EGP 300 from the balance on his electricity meter. He pointed out that some mistake must have occurred or that there was a problem with the meter. But he was surprised by the employee’s reply: “This deduction came as a result of reaching the sixth tier, as about EGP 378 is deducted as the difference between tiers.”
Hassan was not aware of this information about the tier difference, perhaps because until two years ago he used an electromechanical meter, under which the full electricity bill is paid at the end of each month, and because increases had not been as large and visible as this time. According to the latest increase in electricity prices, when consumption reaches the sixth tier, that is, more than 650 kilowatt-hours, the tier Atef reached, consumption from 650 kWh to 1,000 kWh is charged at EGP 2.10 instead of EGP 1.40, an increase of 50%, and about EGP 378 is deducted as the difference in the cost of tiers.
After learning that this deduction was not a mistake but an increase in electricity prices, Hassan, a trader and a member of the middle class whose income reaches EGP 20,000 a month and who supports a family of six, began to feel the weight of rising electricity prices. He says: “I cannot keep up with the situation; topping up the meter has become frequent.”
The man in his fifties owns a home that relies on a prepaid meter, and he currently relies on basic electrical appliances, in addition to a vacuum cleaner and only one air conditioner that used to run during sleeping hours. Although there are two water heaters in his home, they do not operate during the summer.
After the latest increase in electricity prices, Hassan, whose electricity consumption passed the seventh tier by the end of the month, finds himself paying nearly EGP 3,000, about 15% of his income, which is not a small share. This pushed him to try to avoid reaching the sixth tier by setting a schedule for running the air conditioner and treating it as a luxury, despite the heat in his home, which is surrounded by sun on all sides, so that it is used only for limited hours while the family gathers to eat and watch television, and once the fourth tier is exceeded, the air conditioner is not turned on at all until the start of a new month.
He also does not use the washing machine at the end of the month until the new month arrives, so as to return to the lower-cost first tier, considering that washing clothes at the end of the month has also become a luxury.
He concludes his conversation with Zawia3 by asking: “I consider my income good, yet I have started monitoring the meter constantly, and I feel that electricity is a luxury and its cost a burden. So what about those with low wages?”
The Luxury of Sitting in Several Rooms
Although the government raised the minimum wage for the private and public sectors to EGP 6,000, this decision does not apply to micro-enterprises with fewer than ten workers.
Mohamed Sayed is one of those whose wage has not exceeded the minimum wage. He is 35, works in a small shop and supports his wife and two children. His monthly salary is EGP 5,000, and he lives in a home under the old rent law, which costs him EGP 500 a month in rent.
With his limited income, he relies on a prepaid meter to pay for electricity; until about six months ago, he relied on an old electromechanical meter. He comments: “The old meter’s cost was low; I used to pay about EGP 100 for monthly consumption. But after the meter stopped and was replaced with a prepaid meter, I now top up about EGP 300, and I may reach the fourth tier by the end of the month.”
Regarding the difference in electricity prices depending on the meter, which Sayed mentioned, Hafez Salmawy, former head of the Egyptian Electric Utility and Consumer Protection Regulatory Agency, tells Zawia3: “Electricity prices do not differ according to the meter; the prices are the same and the tiers are fixed. What differs is the accuracy of the meter. Old meters may be inaccurate in their readings, unlike smart and prepaid meters, which calculate consumption accurately. Therefore, the correct comparison is not based on the type of meter and the amount of the bill or top-up, but on the amount of consumption and the tariff at that time.”
Returning to the cost Sayed now pays monthly for electricity after the latest increase, it represents 6% of his monthly salary. This share may seem small, but it is a heavy burden on his family amid other rising living costs, and it is a share he pays after imposing a strict, austere regime on his electricity consumption. He owns only basic electrical appliances, without air conditioners, as he describes it, and still limits the use of those appliances, even limiting the use of lighting. He says: “I no longer let the children play in one room while I am in another. We all sit in one room now to reduce consumption and not exceed the third tier.”
As for the budget, he stresses that it is certainly affected with every increase, and that he tries to adapt by rationing consumption and economising on life’s basics. He explains: “When we decide to have a meal with chicken, we do not buy a whole chicken, and we do not buy the month’s needs at once but only the day’s needs, because prices are no longer stable and the increases have become continuous, so buying our needs daily allows us to adjust the budget as needed.”
Continuous Increases and Declining Subsidies
The Ministry of Electricity and Renewable Energy had raised household electricity prices for the second time in the same year, 2024, by between 17% and 50%, starting with the September 2024 bill, which reflects electricity consumption during August 2024. The Egyptian government applies a tier system to electricity bills, dividing monthly household electricity consumption into seven tiers, with the cost per kilowatt-hour rising as consumption increases. This system aims to support the neediest groups and reduce high energy consumption by raising the cost of the higher tiers.
After the latest increase, the first tier, from 0 to 50 kWh, costs 68 piasters per kWh instead of 58 piasters; it is the lowest-cost tier and receives the largest subsidy, and prices continue to rise as consumption increases. When consumption exceeds 650 kWh (the sixth tier), EGP 378 is deducted as a tier difference. Finally, the seventh tier, for consumption above 1,000 kWh, is charged at EGP 2.23 instead of 165 piasters, an increase of 35% from zero, and this tier is no longer subsidised.
This year’s electricity price increases were not the first of their kind; the idea of raising electricity prices began in 2010, when electricity prices were supposed to rise by 5% across all tiers except the tier for low-income earners, but the January revolution and the political changes in the country at the time prevented this from being implemented.
According to the annual report of the Egyptian Electricity Holding Company for 2010-2011, from 1993 until 2010 the price of the first tier for household consumption, which benefits all subscribers, was fixed at five piasters per kWh, representing about 15.6% of the actual cost of supplying electricity to homes. Household electricity prices were also subsidised up to a consumption of 1,400 kWh a month. Meanwhile, the Egyptian Electricity Holding Company’s annual report for 2012-2013 showed that the electricity subsidy for household consumption had been reduced to consumption of up to 1,100 kWh a month, and the total subsidy provided to the household sector at the time reached EGP 13.2 billion.
In 2014, the government embarked on the first increase in electricity prices within a long-term plan aimed at eliminating subsidies entirely. This decision came after the financial deficit in the electricity sector reached EGP 163 billion, when the cost of producing a kWh was 47.4 piasters while the selling price was only 22.6 piasters. At that time and until 2016, increases were added only to the upper tiers, while the first three tiers remained fixed at (7.5 piasters, 14.5 piasters and 16 piasters) respectively.
The situation changed after the first flotation of the pound in 2016, as increases began to be applied to all tiers from 2017 until today. For his part, Egyptian Prime Minister Mostafa Madbouly stated in May 2024 that he had tasked the Minister of Electricity, Mohamed Shaker, with preparing a gradual four-year plan to raise electricity prices, meaning that the increases will continue.
Low-Income Earners and Keeping Up with the Increases
The increase in electricity prices is the result of several interrelated factors, most notably the rise in global gas prices. Egypt relies on natural gas for 60% of its power plant operations, and with the sharp rise in global gas prices from three dollars to 13 dollars per million British thermal units, production costs were directly affected. In addition, the decision to float the Egyptian pound last March worsened the cost of producing electricity, as the cost of producing a kWh rose from 177 piasters to 223 piasters, an increase of nearly 26%. The decline in the pound’s value also inflated the bill for the fuel needed to run power plants, which jumped from EGP 1.6 billion in 2020 to EGP 4.7 billion currently, increasing pressure on the electricity sector and its financial resources.
This comes in the context of Egypt’s continued borrowing from the International Monetary Fund and the government’s commitment to the economic reform programme agreed with the Fund, which requires lifting subsidies gradually while continuing to support low-income earners. Electricity subsidies have indeed declined significantly in Egypt over the past ten years. According to Ministry of Finance data, the electricity subsidy in the 2024-2025 budget reached about EGP 2.5 billion (USD 51 million), compared with EGP 23.60 billion (USD 480 million at current exchange rates) in the 2014-2015 budget.
Officials’ statements focus on the claim that the first electricity tiers serving low-income earners will remain subsidised. Prime Minister Mostafa Madbouly made this clear at a press conference in August 2024, explaining that the subsidy provided to those tiers would come from the payments of the higher-consumption tiers, and that the increases on the lower tiers would be slight. But are the increases really slight for low-income earners?
Soad, 50, says her monthly income is limited to a pension of EGP 4,000. She lives with her two daughters after her son married and moved to another home. Her home relies on an old electricity meter, and she owns only basic appliances, with no air conditioning. In August, she paid an electricity bill of EGP 477 for consuming 365 kWh, which puts her in the fifth tier. This bill represents about 12% of her income, which certainly affects her budget.
Soad’s bill is high compared with what all consumers are supposed to pay, as the former head of the Electric Utility Regulatory Agency told us that the ideal share should be 4% of spending, explaining: “There is a study on consumers’ ability to pay, and based on this study, care is taken that the amount the consumer pays for electricity does not exceed 4% of spending, not income, because sometimes there are other sources of income besides a salary or pension. There is also an income and expenditure survey issued by the Central Agency for Public Mobilization and Statistics every two years on 25,000 households of different income levels. Accordingly, if a household’s total income is about EGP 4,000, its electricity bill should be EGP 160.”
On how much more low-income groups feel the impact of successive electricity price increases compared with higher-income groups, Mai Kabil, economic researcher at the Egyptian Initiative for Personal Rights, tells us: “The impact differs greatly depending on available income. Lower-income groups are more affected by price inflation in general, because any increases affect them more than others. According to the official income and expenditure survey, the data indicate that the lowest-income groups spend nearly half of their income on food, the sector that has seen the highest inflation over the past two years. The other half of limited income is spent on other basic needs such as goods and services whose prices have risen sharply, foremost among them electricity.”
She continues: “Although the latest increases in electricity prices were smaller for the lower-consumption tiers than for the higher tiers, the lowest-income groups have seen a large accumulation of increases over the past ten years. For example, the prices of the lowest tier have multiplied about eightfold, while the prices of the second tier have risen more than fourfold, whereas the highest tier has seen an increase of only about twofold over the same period.”
The economic researcher at the Egyptian Initiative for Personal Rights adds: “Poverty figures in Egypt have not been updated since 2020, before successive crises such as the COVID-19 pandemic and the devaluations of the pound, which led to the deterioration of living standards for millions of Egyptians. Any price increase, especially for basic goods and services, is an unbearable burden on limited-income groups.”
According to estimates by the Egyptian Initiative for Personal Rights, the poverty line as of last March reached about EGP 1,800 per person, compared with about EGP 860 in 2020, after accounting for accumulated inflation. This means a family of four needs about EGP 7,100 a month to cover its basic needs only. With income levels not rising at the same rate, this pushes more people below the poverty line, according to Kabil.
The Government Does Not See the Citizen
Among the crises the electricity sector has gone through is the fuel shortage, in addition to high temperatures that affected consumption levels and the efficiency of power plants, according to officials in previous press statements. The government dealt with that crisis through load shedding, with power cut daily for an average of up to two hours. Load shedding had negative effects on citizens that extended to the loss of lives, as several deaths occurred in lifts due to power cuts. Thanaweya Amma students were also affected by power cuts during their exam period, which pushed them to study in places of worship and wedding halls, in addition to financial losses and damage to appliances caused by power fluctuations.
While most Egyptians try to adapt to the crisis of rising electricity prices by reducing consumption, changing their lifestyle and adopting austerity, growing financial pressures may push some individuals to adopt illegal or unethical behaviours, such as stealing electricity or tampering with meters, in an attempt to ease the financial burden. Atef, the citizen we spoke with, said that a technician offered to connect his air conditioner outside the meter, but he refused because he considered this act theft.
Ordinary citizens find themselves trapped between the pressure of rising bills and their inability to meet their basic needs, especially as all prices continue to rise. The latest data from the Central Agency for Public Mobilization and Statistics on the annual change (August 2024 compared with August 2023) showed that the food and beverages section recorded an increase of 28.1%, while the housing, water, electricity, gas and fuel section recorded an increase of 12.5%.
Mai Kabil stresses the need to look into the crisis of rising prices. She says: “There is certainly an urgent need to slow the pace of price increases, and it would even be better to postpone this plan entirely until inflation rates fall. The International Monetary Fund always sees the optimal solution as cutting subsidies, yet the share of subsidies in GDP is decreasing year after year, while government debt and its interest are increasing, which directs a larger share of government spending each year towards repaying these debts. So we find ourselves borrowing from the IMF and following its conditions, which require cutting subsidies, and in the end we allocate more of our resources to repaying loans.”
She adds: “People should not bear the consequences of mismanagement. The economy faces crises resulting from structural imbalances that require urgent reforms, and subsidies are not the main cause of these imbalances. Therefore, it makes no sense for the state to raise prices at the same time as it takes decisions to devalue the pound, a decision that directly affects the value of the money citizens own.”
Despite the falling incomes of growing segments of Egyptians, the Egyptian government always surprises them by raising the prices of services considered essential, which leads to many complaints that, according to citizens, perhaps no one responds to.
