{"id":16711,"date":"2026-08-01T15:37:48","date_gmt":"2026-08-01T13:37:48","guid":{"rendered":"https:\/\/zawia3.com\/?p=16711"},"modified":"2026-10-07T00:19:29","modified_gmt":"2026-10-06T22:19:29","slug":"electricity-prices","status":"publish","type":"post","link":"https:\/\/zawia3.com\/en\/electricity-prices\/","title":{"rendered":"Cutting Subsidies: Egypt Raises Electricity Prices for the Fifth Time in Five Years"},"content":{"rendered":"

Yesterday, Friday, the Egyptian government increased household electricity prices<\/a> by an average of 12%, the second electricity price adjustment this year. In April, it raised commercial consumption tariffs by between 16% and 20%. The decisions come amid a worsening supply crisis affecting natural gas, Egypt\u2019s main source of electricity, following the US\u2013Iran war.<\/p>\n

The latest increase covers most household consumption tiers<\/a>. The government kept the first tier unchanged, describing it in its official statement as the most heavily subsidized category, intended for low-consumption households. Increases in the remaining tiers range from around 11% to 12%, as the government continues restructuring tariffs<\/a> to gradually narrow the subsidy gap and align selling prices with production costs.<\/p>\n

Tariff data<\/a> show that increases have not affected all customers equally. Subsidies<\/a> have gradually diminished as consumption rises. The first tier, covering 0\u201350 kilowatt-hours, increased from EGP 0.48 per kilowatt-hour in 2021 to EGP 0.68 today, around 42%. For households consuming more than 1,000 kilowatt-hours, the unit price rose from EGP 1.45 to approximately EGP 2.89 after the latest increase, a rise of nearly 99%.<\/p>\n

The government began restructuring electricity subsidies<\/a> in 2014, accelerating the process in recent years alongside its economic reform program and IMF loan commitments. It says it seeks to narrow the gap between generation costs and consumer prices. Experts argue that repeated increases directly burden households and raise the prices of goods and services through higher production and operating costs.<\/p>\n

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Why now?<\/h2>\n

The Electricity and Renewable Energy Ministry<\/a> said the new increase seeks to balance easing the burden on citizens with sustaining electricity generation, transmission and distribution. The state, it said, still bears around EGP 100 billion annually in the difference between actual generation costs and selling prices.<\/p>\n

The ministry added that subsidies gradually decline as consumption rises, disappearing entirely for customers consuming 2,000 kilowatt-hours a month, who pay the full cost without government support.<\/p>\n

The increase came just one day after the IMF Executive Board announced completion of the seventh review<\/a> of Egypt\u2019s economic reform program. This enabled the disbursement of approximately $1.8 billion, comprising $1.5 billion under the Extended Fund Facility and around $272 million under the Resilience and Sustainability Facility.<\/p>\n

Although the IMF did not officially link the new disbursement to the electricity price increase, its documents<\/a> identify energy subsidy reform and adjustments to fuel and electricity prices among the government\u2019s responses to fiscal pressures from the Middle East war and higher energy import costs. The Fund considers these measures supportive of macroeconomic stability<\/a>.<\/p>\n

In its seventh-review statement<\/a>, the IMF urged further fiscal and structural reforms, particularly stronger public debt management, lower financing needs and faster divestment of state-owned assets. It also called for a reduced state role in economic activity and a better business environment to attract private investment, alongside monetary and fiscal policies to contain inflation while protecting the most vulnerable.<\/p>\n

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Parliamentary challenges<\/h2>\n

Several MPs, including Freddy El-Bayadi, Mohamed Fouad, Irene Saeed and Diaa al-Din Dawoud, submitted urgent oversight questions to the government and Electricity Ministry. They sought explanations and greater consideration of the social impact, accusing the government of relying on price increases to address successive economic crises without accounting for their effect on citizens.<\/p>\n

El-Bayadi, an MP and deputy leader of the Egyptian Social Democratic Party, says this is the fifth household electricity price increase since July 2021 and the fourth since early 2024. In 2026, the government approved two changes within just four months, adjusting higher-consumption tiers in April before raising most tiers again.<\/p>\n

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He told Zawia3 that presenting the decision as an average 12% increase obscures cumulative rises over recent years, which have brought some tiers close to double their 2021 prices. Continued inflation and rising fuel, transport and commodity costs, he warned, threaten further erosion of household purchasing power and higher living costs.<\/p>\n<\/blockquote>\n

El-Bayadi submitted a parliamentary question requesting the basis for calculating the new tariffs, including actual generation, transmission and distribution costs, technical and commercial losses, uncollected arrears, and steps taken to reduce operating costs before raising prices.<\/p>\n

He also requested the alternatives considered, the number of households actually benefiting from freezing the first tier, and studies of the social and inflationary effects. He asked whether the increase reflected a temporary rise in fuel costs or a permanent tariff adjustment, calling for implementation to be suspended until these data are presented to Parliament and reviewed.<\/p>\n

MP and economist Mohamed Fouad identifies two main reasons for the increase. The immediate cause is sharply higher generation costs as fuel becomes more expensive. Egypt\u2019s natural gas production fell from approximately 6.9 billion cubic feet a day at its 2022 peak to less than 3.7 billion today, increasing dependence on more costly imported gas and directly raising electricity generation costs.<\/p>\n

In recent months, Egypt has increased liquefied natural gas imports<\/a> to meet growing electricity demand, particularly in summer. As the gap between generation costs and selling prices widens, the government has continued restructuring tariffs to reduce the subsidy burden on the public budget.<\/p>\n

The second reason is structural and concerns public finances. Fouad says limited fiscal space, with around 64% of total budget allocations going toward interest and principal repayments on public debt, restricts the government\u2019s ability to subsidize essential services. Price increases become the quickest fiscal option, although the least equitable in distributing economic burdens.<\/p>\n

Fouad stresses that any tariff increase must be accompanied by tangible improvements in service quality and reliability. He submitted a parliamentary question to the prime minister requesting internationally recognized electricity-network performance indicators, including SAIDI, measuring average interruption duration; SAIFI, measuring interruption frequency; and CAIDI. He asked for the results for distribution companies over the past five years.<\/p>\n

He calls for an assessment of whether substantial state investment in electricity has improved actual service, along with regular reports enabling Parliament and the public to assess performance objectively. Publishing these indicators transparently, he argues, is essential for judging system efficiency and investment returns beyond media statements.<\/p>\n

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From the gas crisis to the electricity bill<\/h2>\n

The latest price increase cannot be separated from the natural gas crisis Egypt has faced for approximately two years. Despite surplus generation capacity after building major power stations, securing the fuel needed to operate them has become the main challenge. Dependence on gas<\/a> means any decline in domestic output or increase in import costs directly affects electricity production costs.<\/p>\n

The new increase coincides with continued reliance on LNG imports following declining production at major fields, notably Zohr, and rising domestic demand, especially in summer. Higher global prices and exchange-rate volatility have increased the fuel import bill and intensified pressure on the electricity sector\u2019s budget.<\/p>\n

In the first half of 2026, Egypt\u2019s fuel import bill rose to $12.5 billion<\/a>, including $4.7 billion in natural gas imports. Gas represented approximately 37.6% of the total fuel bill, illustrating the financial pressure of supplying domestic energy needs amid sustained dependence on gas-fired generation.<\/p>\n

LNG imports<\/a> increased during the first months of the year: 0.85 million tonnes in January, 0.97 million in February and 1.10 million in March, followed by 0.96 million in April, 1.04 million in May and 1.33 million in June. These figures reflect growing dependence on imports to meet energy demand.<\/p>\n

The electricity-generation mix cited in the report is dominated by natural gas, at 82%<\/a>. Hydropower accounts for 6.18%, wind 2.96%, solar 2.42%, other fossil sources 6.71% and biofuels 0.04%. Gas therefore remains the backbone of generation, despite growing but still limited contributions from other sources.<\/p>\n

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Gas: from self-sufficiency to crisis<\/h2>\n

Less than a decade ago, Egypt was being heralded as an emerging regional energy power after the discovery of the giant Zohr field<\/a> in 2015, described as a strategic turning point in its economic future. Production began in late 2017. Cairo moved toward exporting surpluses<\/a> and signed agreements to liquefy gas for neighboring countries, including Israel, which saw Egyptian infrastructure as a way around export obstacles.<\/p>\n

The picture gradually changed<\/a> with domestic difficulties and shifting regional energy dynamics. By 2023, Zohr\u2019s production was declining, attributed in technical reports to insufficient pumping and fewer new discoveries. Domestic demand grew with population increases and energy-intensive industries. Israel meanwhile accelerated development of offshore fields, especially Leviathan and Tamar, which became central to its gas sector.<\/p>\n

Under a 2018 agreement between Israel\u2019s Delek and Egypt\u2019s private Dolphinus company, Egypt began importing Israeli gas<\/a> for liquefaction and re-export to Europe. The deal was promoted as part of a strategy to turn Egypt into a regional energy hub. Some volumes, however, covered domestic shortages while official messaging emphasized exports and profitability.<\/p>\n

As Egypt\u2019s domestic energy crisis deepens and export revenues show signs of contraction, the latest agreement highlights a striking reversal. Egypt, among the region\u2019s early gas discoverers, now depends on Israeli gas for essential needs. Israel has shifted from buying Egyptian gas a decade ago to becoming a major supplier, within a complex relationship extending into eastern Mediterranean power and political dynamics.<\/p>\n

Figures illustrate<\/a> the central role of gas in Israeli exports to Egypt. Petroleum gas exports alone reached $2.13 billion in 2023, equivalent to 95% of Israel\u2019s total exports to Egypt. Egypt\u2019s gas output fell by 15% between January and July 2024, prompting increased imports. Israeli supplies reached 4.84 billion cubic meters in the first half of the year cited in the source, compared with 4.24 billion in the corresponding period a year earlier.<\/p>\n

The earlier gas-market figures cited in this section put Egyptian production<\/a> at approximately 5 billion cubic feet daily, Israeli imports at around 1 billion, and consumption at 6.7\u20136.8 billion. Observers say this dependence has strategic and security dimensions. The $15 billion gas agreement signed in 2020 with companies including Delek Drilling and Chevron was also part of a broader regional cooperation trajectory between Israel and several Arab capitals.<\/p>\n

Domestic gas production declined to approximately 30.19 billion cubic meters in the first seven months of 2024, from 35.5 billion in the same period of 2023, a fall of nearly 15%. The decline was attributed principally to depletion at major offshore fields, including Zohr, slower exploration and delays in planned development projects such as Raven, which those earlier projections expected to enter service after 2025.<\/p>\n

More detailed annual figures<\/a> show output falling by 17%, from 59.29 billion cubic meters in 2023 to 49.37 billion in 2024. Production in the Mediterranean basin, accounting for 72.8% of Egypt\u2019s total, declined by around 18%. The figures cited for that period put domestic demand at 6.2 billion cubic feet a day and output at no more than 4.6 billion. Egypt became a net LNG importer for the first time since 2018, importing 2.8 million tonnes in 2024 while LNG exports fell 84% to 0.54 million tonnes.<\/p>\n

This decline exacerbated repeated power outages. The earlier figures cited in this part of the source put gas at 60% of the generation mix, differing from the 82% figure cited above. Egypt increased reliance on Israeli imports<\/a> to compensate, with supplies around 1 billion cubic feet a day and an earlier projection of 1.07 billion by January 2025. The plans described in that source anticipated continued dependence through 2027 to close the supply\u2013demand gap.<\/p>\n

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Does the government have alternatives?<\/h2>\n

El-Bayadi says the government could have pursued alternatives before raising electricity prices, but chose the administratively easiest and socially most expensive option: passing a larger share of the bill to citizens. Alternatives included reducing technical and commercial network losses, collecting arrears from government entities and major customers, reassessing financing and debt costs, accelerating renewable energy projects, and conducting a published independent review of kilowatt-hour production costs.<\/p>\n

Even if higher fuel costs or an emergency gas shortage justified an increase, he argues, it could have been temporary, with a clear end date and automatic reductions if production costs declined. He also criticizes linking subsidies solely to consumption, which does not necessarily reflect household income or ability to pay.<\/p>\n

On timing, El-Bayadi says no official document establishes that the IMF demanded the specific increase approved by the government. Nonetheless, the decision forms part of the agreed reform framework, including energy subsidy reform and narrowing the gap between generation costs and selling prices.<\/p>\n

Completion of the IMF program\u2019s seventh review on July 30, followed by the electricity increase the next day, makes the relationship between the events worth examining, he says, even without proof that the increase\u2019s size or timing was a direct condition for the new loan disbursement.<\/p>\n

Final responsibility lies with the government, El-Bayadi stresses. The IMF sets a broad reform framework but does not determine electricity tariffs, the affected tiers or implementation dates. The government chooses economic alternatives and accompanying social protection, while the Fund\u2019s own documents emphasize protecting those most in need.<\/p>\n

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\u201cThe IMF may demand lower energy subsidies, but it does not require citizens\u2019 pockets to be the sole source of funding for that reform. The government had numerous alternatives but chose the easiest route for itself and the most expensive for citizens,\u201d El-Bayadi says. Economic crises and fiscal pressures should not permanently justify shifting reform costs to citizens without addressing shortcomings within the sector.<\/p>\n<\/blockquote>\n

The latest increase continues a series of tariff restructuring decisions that began years ago and accelerated recently. Since 2021, the government has approved five major rounds of household electricity price increases. The latest, in July 2026, raised most consumption tiers by an average of 12% while keeping the first tier unchanged.<\/p>\n

The decision is part of a prolonged energy crisis and mounting fiscal pressure, as domestic gas production declines and import costs rise alongside economic reform commitments. Citizens continue to bear the cost of these economic pressures.<\/p>\n","protected":false},"excerpt":{"rendered":"

A new electricity price increase adds to household pressures as declining gas production, rising import costs and debt repayments constrain Egypt\u2019s public finances. MPs question the alternatives the government left unused.<\/p>\n","protected":false},"author":4,"featured_media":15961,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[409],"tags":[],"kateb":[6247],"class_list":["post-16711","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics-en","kateb-rasha-ammar"],"jetpack_featured_media_url":"https:\/\/zawia3.com\/wp-content\/uploads\/2026\/08\/\u0627\u0644\u0643\u0647\u0631\u0628\u0627\u0621.png","_links":{"self":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/16711","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/comments?post=16711"}],"version-history":[{"count":1,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/16711\/revisions"}],"predecessor-version":[{"id":16712,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/16711\/revisions\/16712"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/media\/15961"}],"wp:attachment":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/media?parent=16711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/categories?post=16711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/tags?post=16711"},{"taxonomy":"kateb","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/kateb?post=16711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}